Will Gold Prices Break New All-Time Record Highs This Week?

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Updated: Mar 20, 2023, 12:22 UTC

The precious metal markets recorded a net inflow totaling $5.9 billion. That's the second largest inflow into safe-haven metals ever recorded in a single week since the 2008 Global Financial Crisis.

Escalating Signs of a “Global Financial Crisis 2.0

There is no denying that March has certainly started off with a bang – bringing with it a series of highly lucrative money making opportunities from re-accelerating inflation, a monetary policy dilemma for central banks to signs of an escalating “Global Financial Crisis 2.0”, tearing through the markets.

Exactly one year ago, the Federal Open Market Committee embarked on their most aggressive interest rate hiking campaign since the 1980s. The goal: to arrest a stubborn inflation wave that central bank officials spent the better part of a year dismissing as “transitory.”

Historically every time the Federal Reserve has engaged in an interest rate hiking cycle, they have kept going “until something eventually breaks”.

And that’s the exact situation they find themselves in, once again on the one-year anniversary of their rate hiking campaign!

Two weeks ago, the collapse of Silicon Valley Bank and Signature Bank – marked the second-biggest banking failures in U.S history since the 2008 Global Financial Crisis – while simultaneously highlighting vulnerabilities in the banking system and displaying compelling evidence that financial institutions are struggling from the consequences of soaring interest rates.

A week on, and a third U.S bank – First Republic Bank has been propped up with a $30 billion bailout – preventing it from collapsing, for the time being anyway. The market turmoil also spread to Switzerland’s second-largest lender – Credit Suisse – wiping out over $60 billion in value from European banks across the continent, in a single day alone.

Over the weekend, UBS Bank agreed to buy Credit Suisse in a historic $3.3 Billion deal. But this still may not be enough to prevent risk of contagion spreading across the broader banking sector – and the global economy.

Depositors aren’t waiting around to find out, which bank fails next.

On Friday, U.S customers withdrew a total of $42 billion from their accounts. That’s $4.2 billion an hour, or more than $1 million per second for ten hours straight.

Meanwhile, the precious metal markets recorded a net inflow totalling $5.9 billion. That’s the second largest inflow into safe-haven metals ever recorded in a single week since the 2008 Global Financial Crisis.

The Safe-Haven Rush: Gold, Silver, and Platinum Prices Surge

The ‘crisis on top of crisis’ that is currently unfolding boosted demand for safe-havens – sending Silver and Platinum prices surging to fresh multi-month highs – with both metals notching up impressive double-digit gains, literally in a matter of days.

The bullish momentum also split over into Gold with the precious metal topping $2,000 an ounce for first time in three years.

Interestingly, that’s the exact level Gold prices were trading at back in March 2020 – just before prices skyrocketed to new all-time record highs.

Since the final quarter of 2022, Gold prices have gone parabolic rallying over $400 an ounce from their November lows of $1,600.

And this could just be the beginning! That’s welcoming news for the Commodity bulls, but painful for anyone sitting on the sidelines, who must now decide how much FOMO they can handle.