Jittery investors piled into safe-haven assets, sending the price of gold soaring to a new record of $4,378 an ounce. The surge, marking gold’s biggest weekly gain since the 2008 financial crisis, came as fresh anxieties over the health of US regional banks rattled global financial markets.
The market turmoil was ignited by announcements from two mid-sized US banks. Zions Bancorporation and Western Alliance both revealed significant exposures to bad loans, one linked to alleged fraud, totaling $150 million between them. This news caused their stocks to plummet.
The anxiety spread rapidly, triggering a domino effect across international markets. European indices like the FTSE 100 and Germany’s Dax fell sharply, with bank shares leading the losses. In Asia, Japan’s Nikkei and Hong Kong’s Hang Seng also closed deep in the red.
The episode revived painful memories of the 2023 regional banking crisis initiated by Silicon Valley Bank’s collapse. Analysts suggest this is a sign of broader credit quality issues after a long period of high interest rates. The VIX “fear index” spiked, reflecting the deep uncertainty gripping investors.