Gold jumped above $2,000 an ounce after JPMorgan Chase CEO Jamie Dimon said Tuesday that the banking crisis was in turmoil and not over yet. At the same time, the dollar weakened significantly.
Dimon said that after the collapse of Silicon Valley Bank and the bailout of Credit Suisse by UBS in March, the chances of a recession have increased.
At the same time, the CEO of JPMorgan stressed that the current banking crisis has nothing to do with the 2008 global financial crisis.
In 2008, there was a growing recognition that $1 trillion worth of consumer mortgages were about to fail, and they were owned by various types of organizations around the world. The current banking crisis, has far fewer financial players involved and fewer problems to solve.
At the start of the banking crisis, Dimon took it upon himself to orchestrate a $30 billion bailout for First Republic Bank from 11 major lenders, urging lawmakers not to overreact and create new rules.
Regarding JPMorgan, Dimon said the bank is potentially ready for higher interest rates and higher inflation over a longer period of time.
As markets digested Tuesday's headlines, the U.S. dollar index fell, and gold jumped nearly $40 to rise above $2,000 an ounce.
The precious metal was waiting for a new spark, with Friday's U.S. jobs data also getting a lot of attention. A disappointing NFP report could serve to change the Fed's monetary policy, which would ultimately support gold bulls.
