March has been quite an eventful month. In mid-March, we saw the banking crisis begin, which started with SVB becoming insolvent, causing the Fed to pivot from their original plan of raising interest rates to cool down the economy.
Since these rate hikes put pressure on banks, like SVB, the Fed now must decide to either cut rates to stop the bleeding or continue. In the last FOMC meeting, the Fed increased rates by 25 basis points, instead of the 50 basis points that most investors predicted. Does this mean the Fed will start cutting rates?
On the plus side, we saw gold futures rally, with the largest percentage gain since November 2022. Silver has also been on the rise this month, starting this month at $28.51 and closing at $32.66, a 14.5% increase. See what David Brady, Technical Analyst and Sprott Money Writer, thinks in our Monthly Wrap Up podcast.
In this edition of The Monthly Wrap-Up, you’ll hear:
· How the recent banking crisis and changing projections for future Fed interest rate hikes impacted the current state of monetary policy and the economy
“The banking crisis was what triggered the rally off 1,800, 1,900 up to over 2,000. And the reason why I went into that discussion on the banking crisis, not just for the reason that you brought it up, but also because that was a trigger for gold to go north. And the reason I brought it up, I went through it, is it's gonna come back again, and that's gonna cause gold to go even higher, which reflects what you're seeing in the long-term charts and the short-term charts. And then let me pivot, excuse that use of the word, pivot, to the Fed. I said last week in my Sprott Money article, I believe the Fed's done. And even if they raised 25 basis points, they've literally told you, "We're done. You know, like, either we're done already and we're gonna let you know on May 3rd, or we're gonna hike 25 basis points and we're done. Or we cut." But they're done. So, that explains why you're seeing yields are going up because money's moving back into the bonds, into stocks. Stocks are doing great.”
To hear David’s full thoughts on this month’s gold and silver news, listen here:
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