After the March FOMC policy meeting, silver and precious metals have outperformed all asset classes, as investor uncertainties about future economic prospects grow.
Since the collapse of U.S. banks, the iShares Silver Trust ETF SLV and the iShares Gold Trust ETF GLD have been popular safe havens and are continuing to extend their gains.
After the Fed's policy statement and Fed Chair Jerome Powell's press conference on Wednesday, precious metals outperformed both Treasury bonds and major market indices, while the BTC USD and stocks fell as risk sentiment deteriorated.
Is Silver the Next Gamestop? The ProShares Strategy ETF BITO, which tracks the performance of the majorcryptocurrencies, fell about 5% over the course of the day, extending losses after the Fed's decision.
The SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 index, and the Invesco QQQ Trust Series, which tracks the Nasdaq 100 index, also reacted badly after the Fed meeting on Wednesday.
The U.S. dollar fell further against major currencies, with the ICE U.S. Dollar index down 0.6%. The 10 year Treasury yield fell from 3.6% to 3.44%.
Adrian Day, chairman and CEO of Adrian Day Asset Management, recently said that the economy is heading for a recession. Add in instability in the financial system and new quantitative easing from central banks, and you have the perfect recipe for higher gold prices. The Federal Reserve increased interest rates by a quarter of a percentage point to 4.75% -- 5% at its March meeting, citing that further increases may be appropriate. During the press conference, Fed Chair Jerome Powell dismissed the prospects for Fed rate cuts, but also stressed the need to assess incoming data with regard to future policy decisions in light of the ongoing stress in the banking system.
The Fed believes that tightening in lending conditions will occur, which may affect growth, job market and inflation, and may mean that monetary tightening has less work to do.
In the Fed's economic projections, GDP growth has been revised lower in 2023 0.4% compared to 0.5% in December and 2024 1.2% vs 1.6% Read also: Inflation Expert Says Markets Are In 'Sweet Spot' As the end of the Fed Rate Hike Cycle Nearss,