The banking crisis could easily push gold to $3,000 an ounce this year, according to one Bloomberg Intelligence strategist. Investors are flocking to the gold market in “safe-haven demand” following the shocking failures of Silicon Valley Bank and Signature Bank. “The banking crisis is part of the economic ebbing tide, and the Federal Reserve is done tightening,” predicts senior macro strategist Mike McGlone. “Conditions seem ample for gold to head to $3,000,” he added. Since then, Credit Suisse has lost almost a quarter of its value, fueling more uncertainty in the banking system. In other news, President MacGuineas of the Committee for a Responsible Federal Budget warns that the U.S. economy has reached a “tipping point” in the “tricky balancing act” between fighting inflation and delaying a recession. “We need to stop the spending, and we need to focus on the saving before we do anything else,” MacGuineas said of Biden’s newly-announced budget, estimated to increase the national debt from $24.6 trillion to $43.6 trillion over the next decade.
Kitco News/Anna Golubova
Gold’s $3k rally? The missing catalyst is here: banking crisis signals economy’s ‘ebbing tide’ – Bloomberg Intelligence
The missing driver to take gold to $2,000 an ounce is here, and it’s the banking crisis. The financial fallout ensures that the Federal Reserve stops its tightening cycle, said Bloomberg Intelligence.
After rallying to five-week highs and trading near $1,920 an ounce Monday, gold comfortably settles in above $1,900 an ounce. Markets are busy digesting the impact of U.S. regulators rushing in to contain Silicon Valley Bank’s and Signature Bank’s sudden failures.
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Fox Business/Kristen Altus
Biden’s economy has reached a ‘tipping point,’ budget watchdog warns
As the U.S. economy tries to tame inflation, avoid recession, and battle bank-run contagion fears, one federal budget watchdog warns that it has reached a “tipping point.”
“This is one of those moments that could be some sort of a tipping point, and all the policy solutions as a result of previous bad, bad policies really aren’t ideal,” Committee for a Responsible Federal Budget president Maya MacGuineas said on “Mornings with Maria” Tuesday. “And that’s where we’re stuck right now.”
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Reuters via Yahoo Finance/Noele Illien
Credit Suisse sheds nearly 25%, key backer says no more money
Credit Suisse lost almost a quarter of its value on Wednesday, dropping to a new record low after its largest investor said it could not provide the Swiss bank with more financial assistance.
“We cannot, because we would go above 10%. It’s a regulatory issue,” Saudi National Bank chairman Ammar Al Khudairy said on Wednesday.
The Saudi lender acquired a stake of almost 10% last year after taking part in Credit Suisse’s capital raising and committed to investing up to 1.5 billion Swiss francs ($1.5 billion).
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