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Crystal Ball Time How Will Bank Failures Recession And Rising Interest Rates Affect Gold And Silver

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jaxenro's Avatar
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 Posted 03/13/2023  10:03 am Show Profile   Bookmark this topic Add jaxenro to your friends list Get a Link to this Message Number of Subscribers
Crystal Ball Time

How Will Bank Failures Recession and rising Interest Rates Affect Gold and Silver Prices?

Thoughts?

This is Silver and S&P from 1-1-2008 to 12-31-2012 the last time we had a bank failure and recession. So far this isn't as bad but I am projecting we could have a 2008 style recession


Crystal-Ball-Time-How-Will-Bank-Failures-Recession-And-Rising-Interest-Rates-Affect-Gold-And-Silver
Edited by jaxenro
03/13/2023 10:33 am
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 Posted 03/13/2023  12:52 pm  Show Profile   Bookmark this reply Add glenmorenee to your friends list Get a Link to this Reply
The Fed has stepped in rather quickly and that should dramatically reduce any further bank failures. Now Feds are stuck. On the one hand they think they need higher rates and on the other a major bank just cratered because of higher rates. Bonds in particular are saying that the recent high was THE high in rates. Gold seems to think so too.

Historically a negative yield curve, i.e. short term rates higher than long term rates, is very bad. So far has always triggered recession. But stock market doesn't seem to want to play along...so far.

Looks like a lot of shorts in gold are trapped in the low $1800s possibly providing another good rally to eat into overhead supply.
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 Posted 03/13/2023  2:32 pm  Show Profile   Bookmark this reply Add jaxenro to your friends list Get a Link to this Reply
I do think the SVB collapse was somewhat unique but yes the fed is in a bind. They need to go up at least 2 points to bring inflation down but it causes other issues

Through five months interest on the debt is 307 billion last year for the same period it was 238 billion. If the trend continues the full year will come in close to 900 billion if rates stay where they are. Can the US budget afford a trillion a year in interest payments? The cost to finance the debt is rising

If I had charted it out from 2018 to 2022 S&P beat silver by a significant margin but in the first year or two silver outperformed. I wonder if there is a psychological effect that in the aftermath of a declining stock market and bank failures people trust metals when they start investing again, but that wears off over a period of stability? One problem is recessions aren't that common so there isn't a lot of data to pull from
Edited by jaxenro
03/13/2023 2:34 pm
  Previous TopicReplies: 2 / Views: 1,545Next Topic  

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