Gold Prices Break Records! JPMorgan Issued Warning!

Gold prices rose above $2,010 an ounce after the release of US economic data, reaching the highest level since March last year. Meanwhile, the precious metal warning came from JPMorgan. Here are the details…

Gold prices break records: Dollar is on the decline

XAU/USD rose on the back of a weakening US dollar and lower US Treasury yields. At over $2,010 an ounce, it broke its annual record. XAU/USD hit $2,024 an ounce, the strongest level since March 9, 2022. At the time of this writing, the precious metal is trading at $2,020.

On the other hand, XAU/USD gained momentum after the start of the American session and the release of the US jobs data. cryptocoin.com As we have also reported, the number of job vacancies, which was 10.5 million in February, decreased to 9.93 million, below the expectation of 10.4 million. Another report showed that factory orders fell 0.3 percent in February, against the 0.5 percent expected decline, and the January figures were revised to -2.1% from -1.6%.

These figures sharply lowered US yields. US 10-year bonds fell 3.38 percent to the lowest level since March 27, while 2-year bonds fell to 3.83 percent from over 4.00 percent. DXY dropped below the 102.00 level to 101.60, the lowest level of the last two months.

JPM CEO: Still turmoil

As a result, the gold market rose as the US dollar weakened and investors digested the latest headlines that the banking crisis was not over. Meanwhile, JPMorgan Chase CEO Jamie Dimon wrote in a letter to shareholders that the banking industry is still in turmoil and the damage from the crisis will continue for a long time. “The current crisis is not over yet, and even when it is over, it will have repercussions in the years to come,” Dimon wrote in his 43-page annual message. He said a recession was more likely after Silicon Valley Bank went bankrupt and UBS bailed out Credit Suisse last month. Dimon used the following statements:

It is not clear when the current crisis will end, although not like it was in 2008. It has created a lot of unease in the market and it is clear that it will cause some tightening in financial conditions as banks and other lenders become more conservative.

Dimon: There was tremendous leverage in 2008

Noting that the risks in the US banking system were “hidden in sight”, Dimon referred to uninsured deposits and interest rate risk at Silicon Valley Bank. Also, stress tests designed according to the Fed’s scenarios have never looked at higher interest rates. “This was not the best time for many actors,” Dimon said. The JPMorgan CEO also stressed that the current banking crisis is not like the 2008 global financial crisis. Dimon used the following statements:

In 2008, it was increasingly recognized that $1 trillion of consumer mortgages were about to fail, and that these mortgages were owned by various entities around the world. There was tremendous leverage in almost every part of the financial system at that time. The current banking crisis involves far fewer financial players and fewer problems to resolve.

Dimon played a key role in the ongoing banking crisis, arranging aid from 11 major lenders for First Republic Bank. Dimon also urged lawmakers not to overreact and to create “thoughtful” new regulations. “It is extremely important that we avoid politically motivated responses that often result in the opposite of what people intend. Now is the time to reflect and coordinate complex arrangements to achieve our desired goals by eliminating costly inefficiencies and conflicting policies.” said.

What do other analysts say about gold prices?

About JPMorgan, Dimon said the bank is prepared for potentially higher interest rates and higher inflation for a longer period of time. Elsewhere, “gold rose as bulls stepped in to buy amid still bullish charts and a weakening US dollar index,” Jim Wyckoff, senior analyst at Kitco, said on Tuesday.

Lukman Otunuga, senior research analyst at FXTM, noted that the precious metal expects a new spark, and much attention is paid to Friday’s US employment data. “A disappointing NFP report could feed speculation about the Fed’s reversal and ultimately support the gold bulls,” Otunuga said. “Prices will likely change until a one-week close is achieved above or below the identified support or resistance levels.”

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