Traders and investors are flocking to gold and silver like it’s going out of style. It seems like the sudden drop in U.S. banking stocks has everyone a bit on edge, and people are seeking out safe-haven assets. The prices of these precious metals are soaring, with June gold up $31.20 at $2,022.70 and July silver up $0.43 at $25.665.
We are once again asking ourselves… what is going on with the U.S. banking sector? Many people are feeling increasingly nervous about the possibility of an interest rate hike by the Federal Reserve. This could cause some of the bigger depositors to transfer their funds to U.S. Treasuries, which would weaken banks even further. Plus, there are reports that the U.S. “JOLTS” labor turnover survey is the weakest it’s been in two years, adding to the overall market uncertainty.
To top it all off, U.S. Treasury Secretary Janet Yellen is warning that the U.S. government might not be able to make all its payments by June 1 if the debt limit isn’t increased. This has spooked buyers, who are now turning to safe-haven options like gold.
Investors are eagerly awaiting the upcoming Federal Reserve’s Open Market Committee (FOMC) meeting, which starts today and ends on tomorrow. They’re also keeping an eye on the European Central Bank’s meeting on Thursday. The FOMC is expected to raise its main U.S. interest rate by 0.25%, following better-than-expected US manufacturing reports from Monday.
On the technical side of things, it looks like June gold futures bulls are currently in a great position, with near-term technical advantages gaining fresh power. Meanwhile, July silver futures bulls are also holding the near-term technical advantage.
Overall, with all this market volatility, it’s important to exercise caution when making investment decisions. But hey, if you’re feeling daring, maybe it’s time to jump on the gold and silver bandwagon! (Remember – this is not investment advice! Just market observations.)
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Til next time,
Rebecca Kerswell
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