BBI INFO
1. Market review: Driven by the risk aversion triggered by the collapse of Silicon Valley Bank and the non-agricultural report, spot gold broke through the three barriers of 1850, 1860 and 1870, and then pared some of the gains, closing up 1.97% to 1867.03 US dollars / Ounces, a new closing high since February 10, and achieved a two-week winning streak. After the non-agricultural statement, spot silver prices continued to climb, eventually closing at $20.53 an ounce, a gain of 2.32%.
2. the “New Federal Reserve News Agency” reports on the twenty-three bank failures in Silicon Valley.
Inaudible Federal Reserve Microphone In his most recent piece, Nick Timiraos argued that the February non-farm payrolls data won’t have much of an impact on the Fed’s earnings forecast as they decide on a rate hike at their next meeting. Wall Street investors are usually concerned about financial stability threats, but after the collapse of Silicon Valley Bank, they reduced their wagers that the Fed will choose to increase interest rates by 50bp.
3. The Silicon Valley Bank UK office was in danger, and the country’s main business institutions had just 24 hours to save it. After filing for bankruptcy, Silicon Valley Bank was acquired by the US Federal Deposit Insurance Corporation. Silicon Valley Bank’s main business, SVB Financial Group, had its credit lowered and eventually canceled by Moody’s. As the incident continues to ferment, the Federal Reserve and the U.S. Treasury are weighing the provision of emergency deposit guarantee authorization; investors are calling on the U.S. government to intervene in the failure of Silicon Valley banks, fearing widespread failures in the technology industry and a wave of layoffs. Challenges with obtaining adequate funding. The United States is contemplating insuring Silicon Valley Bank’s unsecured assets, Bank of London is mulling over purchasing Silicon Valley Bank’s UK company, and key British commercial banks are obligated to save the UK office of Silicon Valley Bank within 24 hours. Musk said he was open to Twitter’s acquisition of Silicon Valley Bank, and the stablecoin giant Circle’s $3.3 billion exposure to Silicon Valley Bank sparked investor concerns; First Republic Bank and Western Alliance Bank said their liquidity and deposits remained Strong; Meituan urgently refuted the rumor that it had no deposits in the bank; some Silicon Valley Bank depositors sought to sell their deposits at a discount.
4. The crisis at Silicon Valley Bank prompted a response from the Federal Reserve. On Monday night at 23:30 local time in Beijing, the Board of Governors of the Federal Reserve System will conduct a special, closed conference. The Federal Reserve Bank’s discount rate and advance interest rate will be discussed and revised. Foreign media outlets have reported that the Federal Reserve is contemplating easing the requirements for banks to use the discount window, allowing institutions like SVB Bank to avoid losses when selling off devalued assets and turning them into cash. The Federal Reserve was asked for feedback but chose not to. Depositors at SVB Silicon Valley Bank will have full access to their money beginning Monday, thanks to a new emergency bank term financing scheme unveiled by the Federal Reserve. The Federal Reserve has stated that it is prepared to handle any potential financial pressure, and the new plan will provide emergency loans for up to a year, with additional assistance from the Treasury Department in the amount of $25 billion.
5. In a combined statement, Sequoia and 325 other venture capital firms and 650 creators said: 650 entrepreneurs who collectively hire over 22,000 people at Silicon Valley Bank have signed a declaration demanding action from authorities to avoid catastrophes. General Catalyst, a VC company, spearheaded the declaration from the industry.
6. U.S. nonfarm payrolls increased by 311,000 in February, down from the prior month but still significantly higher than forecast. Recent Fed swaps indicate that the likelihood of a rate increase of 50 basis points in March has dropped below 50%. Rate cuts by the Federal Reserve of 25 basis points by the end of the year are already factored into Fed swaps.
7.”I am optimistic that this week’s CPI will be in a stable state,” U.S. Vice President Joe Biden said.
MARKET VIEWPOINTS
According to Ed Moya, an expert at OANDA,
Safe-haven buying drives gold higher.
Even though the U.S. non-farm payrolls report on Friday was positive with a gain of 311,000 jobs, it also showed that wage increases were lower than anticipated, and the jobless rate had risen to 3.6% from 3.4%. Bond markets are pricing in a rate reduction before the end of the year, causing a steep drop in yields, and gold prices surged as wagers on a bold Fed rate increase diminished and Silicon Valley Bank’s regional spread prompted some safe-haven purchasing. Two days in a row saw a significant drop in the yield on 2-year government bonds. As worries about liquidity risk are unlikely to be addressed anytime soon, gold is once again the market’s option. Although I am cautious, my long-term outlook for gold remains optimistic. The $1,865 mark is now acting as support after being pushed through earlier as resistance. The price of gold has hit a barrier at $1,880. Once the breakthrough occurs, $1,900 could be in sight. Gold could see a larger rise, perhaps $50-$70 per day, if Tuesday’s inflation data cools down while worries about financial volatility remain.
Everett Millman, a Gainesville coin dealer who specializes in precious metals
The market’s demand for safe haven assets was sporadic and the reaction to SVB’s fall was transitory. Gold prices spiked on Friday as the U.S. currency plummeted due to worries about the security of the financial system. However, the CPI estimate on Tuesday will be the deciding factor in whether or not gold values can remain at their present levels for the rest of the week. Instability in market deals has been a problem. We should focus on how the market responds to the data rather than the data itself. My prediction is that gold will stay in the $1800–$1900 USD band throughout the first part of the year, and that it may even decline further.
Jeff Klearman, Manager of the GraniteShares Portfolio
As the jobless rate was higher than anticipated, salary growth slowed, and the number of new positions created was much lower than the previous figure, gold values increased after the jobs report. Though the statistics don’t indicate to a slowing employment market, they may encourage the Fed to keep raising rates by a token 25 basis points while they wait to see how the previous increases have added up. The market anticipates the Federal Reserve to refrain from returning to its previously active monetary policy, which has supported gold prices along with a decline in U.S. Treasury rates and the currency following the employment data.
Jim Wyckoff, a researcher with Kitco,
Gold prices will rise as demand for the precious metal increases as a secure harbor investment.
After the publication of the U.S. non-farm payrolls data, gold and silver values rose. Safe-haven demand for gold and silver rose as investors became more risk-averse in response to worries about spread risks at Silicon Valley institutions. From an analytical perspective, the next objective for bulls in gold (April futures contract) is a break above resistance at $1,875, while the short-term objective for losers is a break below firm support at $1,800, first seen at Thursday’s low $1830 and then $1825. (Remember that the April contract price is roughly $4 above the price of gold in the open market.)
