Investors Rush Into Bonds and Gold After the Collapse of SVB

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Last Updated on March 15, 2023 by Bitfinsider

On Monday, investors rushed to safe-haven assets such as Treasury bonds and gold, amid an extraordinary plan to shore up the financial system and mitigate the effect of Silicon Valley Bank’s failure.

The 10-year Treasury yield dropped nearly 20 basis points to 3.50%, its lowest level since February 3. The 10-year Treasury note was last trading around 3.54%. The 2-year Treasury yield fell more than 40 basis points to 4.16%, the lowest in more than five weeks. Yields travel in the opposite direction of prices, and one basis point = 0.01%. The iShares 20+ Treasury Bond ETF has increased by 3%.

Meanwhile, gold prices reached their best level since early February, reaching $1,893.96. Gold futures in the United States rose 1.2% to $1,889.40, while the SPDR Gold Trust gained 1.2%.

It increased by roughly 2%. During financial crises, investors tend to gravitate toward gold. Furthermore, reduced interest rates reduce the potential cost of keeping gold with no yield.

Investors sought protection as banking authorities raced to protect depositors with money at Silicon Valley Bank and the now-defunct Signature Bank, hoping to allay worries of widespread contagion. Depositors at both failed institutions will have full access to their funds as part of a series of moves approved by officials over the weekend.

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