Gold’s sudden, sharp move to the upside this morning is not the sort of thing that occurs often during a Fed rate meeting. It looks like the catalyst is a collapse of several regional banking stocks, as the aftershocks from the First Republic failure rumble through the banking system – a signal that more banks might be headed for rough water. In turn, the tumult could present a problem for FOMC members intent on raising rates another one-quarter point. Although it would be difficult to imagine a turnaround on rates at this juncture, the Fed might choose to soften its tone in tomorrow’s statement and follow-up press conference. Many analysts have pointed to higher rates and falling bond prices as the problem at the heart of the current banking crisis.

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