Bank Lending and Deposits in US Banks Falls
21 June, 2023
As at 11am, AEST.
Gold Spot Price $AU2860
Silver Spot Price $AU34.26
Platinum Spot Price $AU1434
Banks have suffered an interesting double edged blow this June. Consumer lending from major US banks dropped $49B and deposits slipped by $79B.
While these figures are a smallish drop in the trillions of dollars currently either loaned or held with the big US banks, they are a sign that consumers are using their savings, and also not applying for new loans with the same frenzy they had previously.
Commercial and industrial loans also fell $13B. Commercial loans are a key indicator of economic growth.
A similar sentiment is also being felt in Australia. With our RBA making clear suggestions of ‘more pain ahead’, ‘start share-living to save costs’ and ‘Australians have enough savings to handle economic pressure’; the path ahead is starting to look very wobbly.
This week we also saw economists putting forward different methods to solve inflation, instead of simply raising rates. The only caveat with all the alternative solutions is that they would take time, great management and a strong government to take this initiative. Considering the current inflation situation is a result of mismanaging our economy over the past 4 years, it will come as no surprise to many that we’ll most probably continue to simply raise rates.
Later today, Federal Reserve Chairman Jerome Powell will give a congressional testimony on monetary policy, giving more insight into their approach to future interest rate rises to combat inflation. Senior officials have hinted at 2 more hikes this calendar year leading up to Christmas. The US500 has embraced the recent pause in rates, currently enjoying 5 straight weeks of gains. This growth may be soured by more upcoming hikes.
Gold and Silver is ranging slightly lower this week, with gold currently selling at $US1938 and silver at $US23.11. Both are still confidently trading above their 200MDA average.
Today we’ll include a daily chart for both precious metals with a larger timeframe of 6 months.
Gold price daily chart from December 2022
Silver price daily chart from December 2022
