Another US bank is seeking a financial lifeline as a crisis of confidence in the country’s banking sector continues.
Shares in PacWest have plunged and the bank has said it is considering its options having been approached by potential investors and buyers.
Bank Failures
Earlier this week, Californian bank First Republic was rescued by US authorities which sold on billions of dollars worth of its loans and deposits to JP Morgan Chase. First Republic is the third US mid-sized lender to fail within the past two months. Silicon Valley Bank was the first to fail in mid-March followed by New York’s Signature Bank.
Read 'Is this the Start of Another Banking Crisis?'.
Share Price Slump
The stock market reacted quickly and the share price of Western Alliance dropped by 23% on Wednesday. Zion, First Horizon and Comerica also each slumped by more than 7%.
Billionaire investor Bill Ackman wrote in a tweet. “Confidence in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to wobble.”
Rising Interest Rates
Some banks have experienced difficulties due to the steady rise in interest rates. Yesterday, the US Federal Reserve lifted the key interest rate again, this time to 5.25% which is the highest since 2007.
Read 'Can My Company Buy Gold?'.
Investment in Technology Firms
Along with interest rate rises, US mid-sized banks including PacWest have been struggling due to investor fears over their loans to venture capitalists, who are heavily invested in technology firms. The technology sector has been cutting jobs as firms struggle with a downturn in demand and high inflation.
The Move to Gold
Having dropped in price to around £1580/oz last week the price of gold rebounded to around the £1620/oz mark. This is in part due to the recent news around the banking confidence crisis.
Our own experience is that demand for gold has risen in recent days, with demand for Capital Gains Tax exempt gold being particularly strong. (See our article Capital Gains Tax – Changes following Autumn Statement)
If you’re an investor in the UK, gold and silver ‘Legal Tender’ coins are exempt from CGT. This means you can make an unlimited tax-free profit on investments of any size and value on any legal UK currency coins.
Examples of CGT-free UK coins include Royal Mint Britannia Coins, Royal Mint Sovereign Coins, Royal Mint Queens Beast Coins and Royal Mint Tudor Beast Coins.
When searching for Capital Gains Tax-free coins on our website, tick the “UK” search filter in the left-hand menu.
Browse all bullion coins that are Capital Gains Tax-Free here.
Here To Help
At times like this stock levels can become diminished. Don’t let this put you off, in most cases you can still place your order and hold the price whilst we wait for the physical bars to come into stock. If you don’t find what you are looking for, give us a call and we should be able to advise on wait times.
We recommend that all readers should do their own research before making any purchases, but if you’d like to speak to a member of the team for some additional guidance, we’d be delighted to hear from you at 01769 618 618, or you can email us at sales@bleyer.co.uk, and we’ll get back to you asap.
