The GOLD PRICE jumped to an 11-month high in Dollars today and set new all-time records in a raft of other currencies as European and US financial shares sank yet again while longer-term interest rates steadied after their sharpest weekly drop since the Black Monday stock-market crash of 1987.

 

Touching $1963 per ounce around this afternoon's price-benchmarking auction in London, gold showed its strongest weekly gain since mid-November at its 5th highest Friday finish ever.

 

Gold priced in Euros touched €1848 – its highest outside the peak of €1900 hit when Russia invaded Ukraine in early 2022 – while a UK gold price in Pounds of £1617 topped this week's previous record high, as did the gold price in Australian Dollars, Japanese Yen and Indian Rupees.

 

Shares in US lender First Republic (NYSE: FRC) meantime plunged by 1/5th despite 11 of America's largest financial firms putting $30 billion into the troubled bank – 6 times its current stock-market value – to "reflect their confidence in the country’s banking system."

 

Thanks to record emergency lending, plus funding for the FDIC's rescue of all SVB depositors of any size, "The Fed balance sheet has jumped by $297bn," says Holger Zschäpitz, finance writer at Germany's Welt newspaper, "the largest weekly increase since the pandemic [as] financial institutions took billions in short-term loans."

 

With some (but not all) pundits, investors and traders widely calling this the end of 'Quantitative Tightening' if not the restart of QE asset purchases ahead of next week's Federal Reserve decision on interest rates, that figure includes $152.9bn borrowed by commercial banks from the Fed's discount window in the week-ending Wednesday, a record call on the 'lender of last resort' topping even the peak of the Lehman Brothers' crisis in 2008.

 

 

This week's total growth in the Fed's balancesheet also includes $11.9bn lent via the new 'Bank Term Funding Program' launched last Sunday alongside the US authorities' rescue of all depositors at the failed Silicon Valley Bank.

 

The BTFP enables commercial banks to post as collateral Treasury bonds, mortgage-backed securities or government agency debt all valued at par, rather than at their current price, breaking with more than 3 decades of regulatory 'mark-to-market' instructions.

 

Today the parent company of Silicon Valley Bank formally filed for bankruptcy following last weekend's collapse, while shares in Swiss giant Credit Suisse (SWX: CSGN) fell by 8.8%, halving yesterday's bounce from fresh all-time lows after emergency action by its central bank.

 

Silver bullion meantime enjoyed its strongest week since early November 2020 – just before news of the Pfizer Covid vaccine crushed precious metal prices and boosted global stock markets – rising 8.8% by noon today from last Friday's London Fix.

 

The price of silver – which finds over half its end-use demand from industry and other productive uses including PV solar panels – then rose back through $22 for the 2nd time this week, trading just 10 cents below Wednesday's 1-month high of $22.39 per ounce.

 

With bullion prices soaring amid the new Western banking crash, inflows net of profit-taking in precious-metal investment trust funds have remained muted this week, with the giant SPDR Gold Trust (NYSEArca: GLD) unchanged in size Thursday but heading for its 1st weekly growth in 5, expanding by 1.3% from last Friday.

 

Smaller competitor the iShares gold ETF (NYSEArca: IAU) has meantime expanded by less than 0.1% from its smallest since end-May 2020, while the iShares silver product (NYSEArca: SLV) has shrunk by 3.3%, making its 4th consecutive weekly outflow.