Banking Crisis 2023: Spotlight Silver and Gold’s Status as Secure Assets

Precious metals are attractive to savers because they are viewed as a kind of safe-haven asset. This means that they tend to increase in value when the economy, markets, or the dollar are performing poorly.

Metals are not only sought after during times of crisis or when geopolitical and economic tension rises. For example, some individuals who are saving for retirement buy gold and silver as a form of insurance against the devaluation of their currency. This strategy seeks to protect their savings from any potential harm caused by its depreciation.

Retirement savers need to be mindful of the long-term effects of decreased value of the US Dollar. When inflation is only at 4%, that can lead to a $272,000 reduction in the purchasing power of a $500,000 savings account over a course of two decades. [1]

It can be claimed that whenever there is fear of a major crisis, such as war, economic downturn, or a banking emergency, gold and silver prices tend to increase drastically.

Anyone hear about a banking disaster?

It’s been a week of bank collapses and worries of a bigger banking crisis. Last Friday, Silicon Valley Bank was the biggest U.S. bank to collapse since the financial crisis and the second-largest collapse in the country’s history. Just two days later, Signature Bank of New York was snatched up by the third-biggest bank failure in the U.S. ever.[2]

Just three days after Signature Bank fell, the stocks of Credit Suisse (CS) – one of the world’s “too big to fail” banks – saw a decrease in value as reports of discrepancies in their financial statements came out.

It is too early to suggest a definite systemic banking crisis is imminent; however, there is significant unease about the banking system’s steadiness. As worries have increased, the prices of gold and silver have advanced.

The thing I want to discuss is this.

Gold and silver can be seen as a textbook example of how savers seek to protect their retirement accounts from the volatility that occurs during crises or the fear of a potential crisis. This is demonstrated by the recent price action of these precious metals.

Currently, the response of precious metals to concerns about the banking industry is providing a vivid demonstration of why certain savers decide to invest in assets perceived as havens of safety.

The purpose of this article is to provide an in-depth analysis of the customary safe-haven behavior of precious metals in comparison to present-day worries about the banking industry. Furthermore, a few other examples of gold and silver skyrocketing when global security was in a precarious state will be discussed.

Those who believe that precious metals are a viable investment during times of crisis may be correct. There are multiple explanations for why many retirees opt to own these metals, with the potential of emerging unscathed during chaotic periods being the most prominent.

Let us explore why.

TD Securities Analyst Concludes Precious Metals Are “Fulfilling Their Role as a Haven in Uncertainty”

It is no secret that the year 2022 has been particularly volatile, as confirmed by Goldman Sachs, making it the sixth most turbulent since the Great Depression.[3] Despite the average 401(k) balance decreasing by almost 25%, gold and silver still managed to hold strong despite the Fed’s rigorous rate-tightening effort.[4]

Expectations of a stronger market for precious metals in 2023 have been somewhat weakened by the indications that price levels will remain low, hinting that the Fed will have to maintain raising rates.

Not long after this, gold and silver saw a sudden surge in popularity due to one of the commodities’ most preferred sources of energy: worries that a major problem might be emerging.

At the close of last week, rumors began to circulate that Silicon Valley Bank could be facing some difficulties. By Tuesday, both Silicon Valley and Signature had failed, and fears were intensifying that a larger banking concern could be on the horizon.

In a span of a few days, gold and silver made it evident why they have earned a status as safe assets. From a week ago Thursday until Tuesday, the cost of gold increased by 5%, while silver skyrocketed by 7.5%.[5]

Analysts have clearly recognized the presence of gold and silver as safe havens, and the recent surge in metals prices appears to be yet another illustration of this.

According to Bart Melek, the head of commodity markets strategy at TD Securities, gold appears to be living up to its role as a refuge from volatility and risk in the eyes of many investors.[6]

The government and Federal Reserve took unprecedented steps to protect all depositors of Silicon Valley and Signature, while simultaneously providing liquidity to regional, mid-tier banks thought to be at greater peril.[7] Just as these efforts began to allay fears of contagion, Credit Suisse (CS) was thrown into a maelstrom of difficulties.

This past Wednesday, the Saudi National Bank, the primary financier of CS, declared that they would not be providing any more funds to the Swiss company. This followed CS’s disclosure the day prior that they had discovered “material weakness” in the way they had kept their financial records in preceding years.

On Wednesday, the announcement caused CS stock to drop by up to 25%, and the financial services industry as a whole experienced a fall in share prices.[8]

Despite the issues CS is facing having nothing to do with the regional banks of America, such as those of Silicon Valley and Signature, the announcement that one of the world’s most critical banks was in difficulty has only intensified the trepidation regarding the strength of mid-tier American banks. As a result, gold saw an extra 1% rise and silver rose by 1.5%.[9][10]

Within the time-frame of just one week, gold had surged 6%, silver 9%, as a consequence of the apprehension of a banking crisis. As Bart Melek from TD Securities accurately said, these metal assets had served their purpose as a safe haven.

Metals appear to have the capacity to reduce the effects of unpredictable events, as has been demonstrated by the other surges in safe-haven-type assets.

In February 2022, when tensions began to rise due to Russia’s invasion of Ukraine, gold and silver reacted accordingly. From the beginning of the month until the first couple of weeks of March, investors were concerned about the potential for a larger conflict.[12] Consequently, gold surged 12% and silver 15%.[13]

Metals had a “safe-haven surge” about a year back due to the U.S. and Iran exchanging missiles, which raised the potential for full-blown warfare between the two countries.[14] During the latter half of 2019 and the initial days of 2020, gold prices rose 7% and silver shot up 8.5%.[15]

When the Russia-Ukraine and U.S.-Iran conflicts began, gold and silver prices rose due to the perceived safety they provide. Nonetheless, as the pressure eased, these metals also declined. It is worth noting, however, that as long as the tensions persisted, precious metals stayed relatively high.

The banking system’s recent apprehensions have caused an upsurge in gold and silver prices. This trend may be tempered when depositors and investors regain their sense of security. Until then, there is no indication that the current strengthening of metals rates will diminish.

It is important to ask, will the cost of gold and silver always decrease when there are tumultuous events? Can the price increase caused by investors seeking a safe haven persist even after the immediate worry has passed?

It is apparent that there exists.

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A Bloomberg Analyst Predicts that a Banking Crisis-Induced Change in Monetary Policy Could Potentially Drive Gold Prices up to $3,000

Following a difficult period of uncertainty, it is possible that prices could remain sustained if changes in fiscal and/or monetary policy, brought about by the current tensions, prove beneficial for metals.

When it comes to geopolitical conflicts, like the current U.S.-Iran situation, usually there is no need to adjust fiscal or monetary policy. However, other types of crises could lead to policy alterations. The result of these modifications on metals can be long-term.

The 2008 financial crisis is a notable example. Subprime lenders started to become insolvent in 2007, with more than 25 of them going out of business between February and March. By the start of August, two Bear Stearns hedge funds had failed, and another one refused to give back customers’ funds. From that point onward, the situation only got worse.

In 2008, gold surged 30% in response to the crisis.[18] To address the situation, the Federal Reserve unveiled its first round of quantitative easing (QE) that same year, and then a second round in 2010.[19] As a result of these unprecedented monetary policies, the price of gold rose by 150% between 2007 and 2011.[20]

The current buzz is that the same narrative might be unfolding in the present. There are several apprehensions that the banking system is incapable of withstanding additional rate hikes, with numerous analysts claiming that the Federal Reserve might even put a stop to further increases as early as the coming week. [21] Nomura Securities’ economists have even proposed that quantitative tightening may have reached its end, and the central bank could instead lower rates by 25 basis points the following week. [22]

McGlone, an expert at Bloomberg Intelligence, believes that if central banks move to an accommodating monetary policy, then gold could reach a price of $3,000. [23]

Precious metals can offer a sense of security during tumultuous times, as there are certain situations in which gold and silver can experience a lasting surge. Even if that doesn’t occur, retirement investors may be comforted by the knowledge that these investments can help to alleviate the stress of a crisis.

The vast majority of people these days use the internet in some form or another. It has become an integral part of life, with many relying on it to stay connected and to perform various tasks. From shopping to banking to entertainment, the web offers us a variety of services that make life easier. Furthermore, the internet has also become a major source of information, providing us with a seemingly limitless amount of knowledge.

[1]’s “Inflation Calculator” was consulted on 3/16/23.

Hannah Lang and Nupur Anand from Reuters reported that Signature Bank has become the latest bank affected by the banking crisis, following SVB on March 12, 2023. This was accessed on 3/16/23.

[3] According to Jonathan Ponciano from, the stock market is expecting “volatile” trading in the upcoming weeks. Additionally, the S&P is estimated to potentially decrease substantially. This report was published on December 15, 2022, and accessed on March 16, 2023.

[4] According to, despite inflation and uncertainty, retirement account balances are on the rise as of February 23, 2023 (accessed 3/16/23).

The London Bullion Market Association’s precious metal fees were consulted on March 16th, 2023.

As a reaction to Silicon Valley Bank’s downfall, gold and silver prices climbed on the 13th of March 2023, as reported by (accessed on 3/16/23).

The U.S. government has taken action and declared that persons with money deposited at SVB will be allowed to retrieve their funds, as reported by Jeff Cox of on March 12th, 2023 (accessed 3/16/23).

On March 15, 2023, Jamey Keaten and David McHugh reported on about the apprehension in the European banking sector, resulting in a drop in the shares of major banking institutions. This was accessed on March 16, 2023.

On March 15, 2023, Jesse Pound of reported that financial stocks declined as Credit Suisse became another difficulty for the sector. This was accessed on 3/16/23.

The London Bullion Market Association provides information on prices of precious metals.

[11] Referencing the same source.

[12] On February 24, 2022, reported that Russia embarked on a “brutal act of war” by invading Ukraine on multiple fronts; this was accessed on 3/16/23.

The London Bullion Market Association provides current prices for precious metals.

A study conducted by the Congressional Research Service in January of 2020 has explored the 2019-2020 Iran Crisis and the US military deployments it entailed. The analysis was accessed on March 16th, 2023.

The London Bullion Market Association provides precious metal prices. [15]

Manoj Singh from wrote an article titled “The 2007-2008 Financial Crisis in Review” which was published on September 18, 2022 and was accessed on 3/16/23.

Tim McLaughlin, a contributor, reported on August 1, 2007 of Bear Stearns suspending redemptions from its third hedge fund, as accessed on March 16, 2023.

The London Bullion Market Association has released the latest figures for precious metal prices. [18]

[19] Amadeo, Kimberly. “What Is Quantitative Easing (QE)?” The Balance, October 25, 2021, accessed March 16, 2023.

The London Bullion Market Association has released the current prices of precious metals.

According to Nick Timiraos of the Wall Street Journal, with bank failures and market turmoil as a result of the current economic climate, speculation is mounting that the Federal Reserve will have to temporarily pause their planned interest rate increases (3/15/23).

Edward Bolingbroke of has predicted that the Federal Reserve’s upcoming meeting will include a rate cut and the halting of quantitative easing. This report was accessed on 3/16/23 and was originally published on 3/13/2023.

According to Anna Golubova from, Bloomberg Intelligence has declared a banking crisis as the catalyst for gold’s $3k rally. This was reported on March 14, 2023 and was accessed on 3/16/23.