Home| Features| About| Customer Support| Request Demo| Our Analysts| Login
Gallery inside!

Gold, Silver May Print Much Greater Gains As A Result Of A Resting Bull Market Triggered By The Banking Crisis

March 19, 2023
minute read

A troy ounce of.999 pure gold was trading at $1,813 per unit at the start of the week. Gold increased 9.65% versus the US dollar in seven days to the current market price of $1,988 per ounce. Gold's ascent comes at a time when global banking system trust is at an all-time low, and five major banks have received bailouts. This week, the price of an ounce of pure silver jumped by more than 12%, jumping from $20.01 to $22.59 per ounce.

Gold is reaching $2,000 per ounce after central US and foreign institutions demonstrated severe vulnerability. In five days, the Federal Reserve gave banks $164.8 billion, wiping off nearly all of the US central bank's monetary tightening policy. As a result of the banking industry's financial crisis, the market anticipates a dovish rate rise this month, of about 25 basis points, or maybe no rate hike at all. Bart Melek, global head of commodities strategy at TD Securities, said this is "excellent news for gold," as he told Trade Algo.

"Markets are expecting that the Fed will go for another 25bps hike and then probably sit on it for a bit and see what happens," Melek stated. "From a gold standpoint, given disturbances in the financial system and the U.S. With the Treasury Department's readiness to assist, we may get accommodation that permits inflation to remain at a higher level for a longer time."

This week, gold gained 9.65% versus the US dollar, while silver gained 12.61% during the previous seven days. In the meanwhile, the U.S. The Dollar Index (DXY) has dropped from 105.65 at the start of the week to 103.864 now. Northstar, a statistics analyst and market movement forecaster, tweeted about gold's performance over the years in comparison to the DXY 21 days ago. "The DXY was 105 [and] gold was $150 in 1974," Northstar claimed at the time. "In 1981, the DXY was 105, and gold was $450. Now, the DXY is at 105, while gold is at $1,810. Do not be concerned about a growing U.S. Dollar Index - gold faithfully measures the loss of buying power over time."

Mike McGlone, a senior macro and commodities analyst, referred to gold as a "resting bull" three days earlier, on March 15. "Gold looks to be an unusual resting bull market contrasted to other risk assets and commodities that are returning from becoming overextended, owing to pandemic-related excess liquidity," McGlone said in an investment letter. "Plunging crude oil may be part of the deflationary spark for the metal to break the resistance of $2,000 an ounce. If history is any indicator, 300 rapidly decreasing commodities, a banking crisis, and Federal Reserve tightening are an oxymoron that might lead to a Fed pivot that boosts gold," McGlone added.

Silver may post even larger gains than gold; Bitcoin is poised to trade similarly to gold and the US dollar. Long-Term Treasury Bonds

The proprietor of aheadoftheherd.com, Richard Mills, claimed on Friday that he feels silver's surge is overstated. "Present signs indicate that silver is significantly undervalued," Mills added. "Right now, on the morning of March 17, the gold-silver ratio is 88:1, meaning it takes 88 ounces of silver to buy one ounce of gold," Mills said, adding that when gold reached $2,000 per ounce, "silver rallied to nearly $30 an ounce, a 147% increase." The investor believes that a significant rise in silver's value "could easily happen again."

Many supporters of gold and silver have great expectations for precious metals in the future. Furthermore, while McGlone feels that current macroeconomic circumstances will have an impact on gold, the market expert believes that banking concerns may be a watershed point for bitcoin (BTC). "Bitcoin may be advancing to trade more like US Treasury long bonds and gold as banks come under duress on the heels of the bond-price drop. "Bitcoin holding above $25,000 is clear evidence of diverging strength," McGlone tweeted.

John Liu
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

Subscribe to our newsletter!

As a leading independent research provider, TradeAlgo keeps you connected from anywhere.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Related posts.