Gold Closes at Record High as Banking Woes Rear Ugly Ahead Yet Again

Arjan Schreur Mar 04, 2024
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Gold futures surged this week amidst mixed economic data and another potential regional bank collapse in the United States. It was a record weekly closing price although it still has not managed to match the all-time high intraday price of $2,135.39 from January 2023. Still, gold bulls must be happy, particularly in an environment where risk-on assets like Bitcoin and tech stocks are also surging back to all-time high prices. 


Bullishness in gold prices was also supported by weakness in the US dollar index and a sudden spike in the price of crude oil. There was also encouraging inflationary data out of the Eurozone where the CPI cooled from January and the core CPI came in at 3.1% on a year-over-year basis. 


Another regional bank has shown some structural failure this week. The New York Community Bancorp (NYSE: NYCB) disclosed some internal problems and replaced their CEO after reporting ten times more losses than in the fourth quarter last year. Shares of NYCB tumbled by nearly 30% as we approach the anniversary of the collapse of Silicon Valley Bank last year. 


Gold continues to show strong demand even as Bitcoin nears its all-time high price of $69,000. Many previously thought that there might be a negative correlation between the two assets, although there hasn’t ever been a distinct correlation since Bitcoin’s launch. It is fairly unusual to see gold, Bitcoin, and the S&P 500 all at near all-time highs.


For the week, Gold COMEX April 2024 futures contracts settled higher by about 2% at $2,091.60. 

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Precious Metal Stocks and ETFs

Gold miners jumped higher on Friday to close out what has been a bullish week for the index. The MIGL Gold Miners Index rose by nearly nine basis points on Friday with 19 of its 20 components trading higher during the session. The lone gold miner that was below water on Friday was Yamana Gold (AUY). The broader index was led by Vista Gold Corp (VGZ) which gained more than 22% on the day. Other major miners like Aegnico-Eagle Mines (AEM) and Barrick Gold (GOLD) were up by 3.25% and 1.91% respectively during the session. 


The Van Eck Gold Miners ETF (GDX) added about 3.7% for one of its best weeks of the year. The fund is still sitting on losses of about 10.6% in 2024 but is showing an ascending triangle pattern on the daily chart which could mean it is ready to take the next leg higher. The Van Eck Junior Gold Miners ETF (GDJX) also posted a solid week with a return of nearly 4.0%. As can be expected, spot Gold ETFs also had a good week. The SPDR Gold Trust (GLD) and the iShares Gold Trust (IAU) both added 2.7% over the past five trading days.


The MISI Silver Miners Index rose by about five basis points with all ten components of the index trading higher on Friday. Endeavour Silver Corp (EXK) led the index with a 13.61% gain, followed by Fortuna Silver Mines (FSM) and Avino Silver & Gold (ASM) which rose by 7.38% and 5.60% respectively to close the week. The iShares Silver Trust ETF (SLV) also gained 2.7% for the week and has outperformed spot gold so far in 2024. 

What’s in Store Next Week for Precious Metals?

Next week’s economic data comes in the form of the February non-farm payroll report which will be released on Friday. We’ll also hear from a number of different Fed members which should give us some more insight into when interest rates will begin to fall. 


We’ll also get the quarterly reports from some major precious metals companies like Franco Nevada, Fortuna Silver, and Silvercrest Metals.