Daily Gold Market Report

Gold inches higher as it attempts to recover from technical selling
Former FDIC head says all banks vulnerable to mark-to-market losses – small and large

(USAGOLD – 3/28/2023) – Gold inched higher this morning as it attempts to recover from technical selling that began at the $2000 resistance level. It is up $3 at $1962. Silver is up 1¢ at $23.17. Before the sell-off, gold had made impressive gains primarily on safe-haven buying spurred by concern about unsettling probems in the banking sector. The press touted those problems as residing mainly in the regional and community banks, but former FDIC head Sheila Bair believes the problem goes much deeper than that.

“We need to be mindful of all unmarked securities at banks — small, medium, and large,” she recently told MarketWatch. In short, the same circumstance that brought down Silicon Valley Bank – an underwater, illiquid bond portfolio – could also affect the larger banks. The subsequent collapse of Credit Suisse, which ultimately failed for the same reasons, adds considerably to her argument. A recent Columbia University study pegged the unrealized, mark-to-market losses in the banking system at $2.2 trillion, rather than the FDIC’s $620 billion figure advanced early in the crisis. Since the new rescue plan began, the Fed has added almost $392 billion to its balance sheet, which now stands at $8.73 trillion.

Federal Reserve balance sheet and gold
(Log scale, 2008-present)

Chart courtesy of TradingView.com • • • Click to enlarge