Gold’s Key Indicator

The comments below are an edited and abridged synopsis of an article by Egon von Greyerz

After the recent bank collapses and string of interest rate hikes, von Greyerz talks about deep concerns for the US monetary system.

Gold’s Key Indicator - BullionBuzz - Nick's Top Six
USA flag and American dollars. American flag blowing in the wind and 100 dollars banknotes in the background.

“It’s not that gold is getting incredibly strong [by itself], it’s that everything else is getting weaker, and that in particular means your currency, whether it’s the world reserve currency, British pound sterling, etc.”

In March SVB Financial Group, the parent company of Silicon Valley Bank (SBV), filed for bankruptcy. Signature Bank, a New York-based regional bank also went under, the third-biggest bank failure in US history. Greyerz argued that these moves portend a larger move. “We have reached the end of this monetary era,” he said. “It doesn’t happen overnight, and it’s taken longer than I expected; nevertheless, it’s happening and… it’s starting to accelerate.”

Investors have been fleeing the banking sector. Year-to-date the SPDR S&P Bank ETF is down 22%. Gold has benefitted, trading above $2,000 an ounce for much of 2023. The fear trade has also benefited the gold miners, which are up 10% year to date.

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