Image Source: Unsplash

The debt ceiling has been getting a lot of attention recently, but either outcome would be bullish for gold. While near unthinkable, if the US government defaults, it would be a blow to the US economy and the dollar. Raising the debt ceiling would lead to more borrowing, but not addressing the underlying causes could lead to a crisis -- with higher inflation and higher interest rates, for starters.

Here is a brief overview of some recent macro factors that may affect gold.

• Is the banking crisis over? Numerous banks remain vulnerable. Recall that the gold price soared when the SVB closure was announced.
• Is a Fed pivot on the horizon? A full Fed pivot would mean a shift from raising interest rates to lowering them. Historically, a dovish Fed is bullish for gold.
• Do-dollarization has become almost a household word. Worldwide efforts here make this a question of when, not if.
• A US recession is likely already here. Gold has risen in all recessions since the 1970's, except two, both of which were single-digit declines.
• US Treasuries have lost their touch to offset against stock losses: the S&P 500 fell 19.4% last year, but the 10-year Treasury lost 16.7%.
• Alaska is the most recent state to pass a bill allowing gold and silver to be used as legal tender. More than 10 states have passed similar bills.
• Central banks bought more gold last year than any year since records have been kept. And in January and February, central banks bought 125 tons, the highest amount year-to-date since 2010.

More By This Author: