Impact of Silicon Valley Bank Failure: Gold Prices Rise Dramatically

Gold Prices Jump to Highest Level in One Month Due to US Banking Crisis

 

Gold prices reached their highest level in one month on Monday (3/13) due to market expectations that the developing banking crisis in the US will prompt the FED to soften its hawkish rhetoric in the coming days.

 

In the past few days, global financial markets have been shaken by the worsening banking crisis in the United States. This was triggered by the failure of Silicon Valley Bank which caused the market to reassess their views on US interest rates.

 

The impact of the failure of Silicon Valley Bank is very significant for global financial markets. The market expects that the increase in US interest rates will slow down or even be stopped for a while by the Federal Reserve to restore confidence in the banking system.

 

In conditions like this, gold prices are one of the attractive investment options for investors. In the coming months, the prospect of an increase in US interest rates is not too high, so gold prices have the potential to rise.

 

Gold price data on Monday (3/13) showed that spot gold prices jumped 0.6% to $1,878.92 per ounce, while gold futures jumped more than 1% to around $1,893.25 per ounce.

 

The failure of Silicon Valley Bank highlights the deepening cracks in the US economy caused by rapid interest rate increases. The Federal Reserve has embarked on its most hawkish interest rate hike in more than 50 years to curb excessive inflation.

 

However, with this banking crisis, the Federal Reserve will face new challenges in maintaining the stability of the US financial market. In the coming days, we will see whether the Federal Reserve will hold back or soften its hawkish rhetoric. For investors, the price of gold is one of the attractive investment options in facing this situation.