Why the SVB Failure Is a Great Reminder to Invest in Precious Metals
The fall of SVB has shocked the globe, with many calling it the greatest bank failure in the US since the global financial crisis of 2008. The bank’s failure is expected to negatively impact numerous groups, ranging from employees who will lose their jobs and investors who may suffer a great deal of financial loss.
This tragic event also serves as a great reminder to invest in precious metals. Want to know how? Read on to learn what the pros at the A+ rated gold and silver investment company have to say.
Background On SVB Failure, 2023
Californian regulators ordered the closure of Silicon Valley Bank’s seventeen branches on March 10, 2023. All seventeen branches had a combined value of nearly 200 billion dollars, loans of over 70 billion dollars, and total deposits of 180 million dollars. Silicon Valley Bank’s journey ended after offering 40 years of impeccable service in the venture capital sector.
The failure of SVB led to unrest among customers, funders, and the bank’s investors and caused debate among many willing to understand the reason behind it and how it will impact them. The fall of SVB is considered the second-largest banking crisis in American history, following the collapse of Washington Mutual, which occurred in 2008.
Why The SVB Failure Is a Great Reminder to Invest in Precious Metals
The SVB failure was a reminder of the potential for precious metals to serve as a safe haven during economic uncertainty. It showed that investing in banking institutions can pose several risks for investors. A better way to understand this is to comprehend how banks function.
Financial institutions like SVB function by accepting deposits, which become their primary funding source. Next, they invest these funds in various securities and lend them to borrowers. The risk is that customers can instantly pull all their funds from the bank whenever they want.
If this happens, the bank will be forced to liquidate its securities to cover withdrawals. Selling the securities poses an issue because their value could have decreased after the bank bought them. This results in the bank lacking funds for the high amounts of withdrawals, which can lead to it becoming bankrupt and investors losing money.
The best part about investing in precious metals is their ability to act as a liquid investment. When you invest in gold, you have the free will to access or trade it anytime you need it.
Impact of SVB Failure On the Precious Metals Market
As the news of the SVB collapse spread among investors, many people flocked to gold and silver investment companies in hopes of securing their wealth. The price of spot gold increased by approximately 2.44%, reaching the highest rate since February.
Moreover, US gold futures also increased by 2.6%. The cost of other precious metals like palladium and silver also increased due to the SVB failure, with platinum gaining by 4.03%, palladium rising by 6.92%, and silver climbing by 6.16%.
Bottom Line
Although it is advisable to expand your investment portfolio, investing in precious metals such as gold and silver is an excellent strategy to minimize the risk of losses. At Orion Metal Exchange, a reputed gold and silver investment company, we offer a diverse selection of superior precious metal products to consumers seeking to build wealth. Contact us to purchase your precious metal products now!
