The US Federal Reserve has been mountain climbing rates of interest for a 12 months now in a bid to tame inflation, and through that point specialists have questioned whether or not its aggressive hikes could break one thing available in the market.

Chatting with the Investing Information Community, Will Rhind, CEO of GraniteShares, mentioned that point has come.

“The quick reply is sure, completely. Financial institution runs are one thing that you just actually do not see usually, and clearly when you might have a scenario the place you haven’t simply financial institution runs, however financial institution failures, that tells you that one thing is damaged,” he mentioned.

Rhind was referring to the latest collapse of Silicon Valley Financial institution and Signature Financial institution, together with UBS’ (NYSE:UBS) deliberate acquisition of its failing rival Credit score Suisse (NYSE:CS). These and different associated occasions have created main turmoil, which has despatched the gold value hovering — the yellow steel is a standard secure haven, and tends to react effectively throughout unrest.

“We are able to speak in regards to the greenback, we are able to speak about actual rates of interest and we are able to speak about all these different components that affect the value of gold. And so they all are vital, and so they do affect gold over the long run,” Rhind mentioned.

“However there’s nothing that influences it greater than worry, and what we have seen this week is worry. And that signifies that individuals have come out shopping for gold, aggressively searching for hedges — attempting to protect capital, shield capital on this specific atmosphere. In these circumstances, that to me is simply crucial function that gold has. It’s that hedge, it’s that asset of the best high quality with no credit score or counterparty danger. Gold will not be going to do a Silicon Valley Financial institution on you, and that is vital to recollect.”

Different treasured metals like silver, platinum and palladium are seeing curiosity too, as is base steel copper. “Proper now, I feel that is an atmosphere the place the value of gold goes up and it is lifting all metals,” famous Rhind.

Watch the interview above for extra of his ideas on the present market turmoil and what’s subsequent for gold.

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Securities Disclosure: I, Charlotte McLeod, maintain no direct funding curiosity in any firm talked about on this article.

Editorial Disclosure: The Investing Information Community doesn’t assure the accuracy or thoroughness of the knowledge reported within the interviews it conducts. The opinions expressed in these interviews don’t mirror the opinions of the Investing Information Community and don’t represent funding recommendation. All readers are inspired to carry out their very own due diligence.