It all started with the surprise collapse of the relatively unknown Silicon Valley Bank that failed to survive the Tech Winter.

The majority of its core clientele, namely startups and other companies exposed to the tech industry, have been in crisis mode for months, as easy money dried up thanks to the Fed's tightening U-turn. Wave after wave of layoffs and other cost cutting measures have failed to make a dent in many cases, so many of SVB's clients had been making massive withdrawals, squeezing the bank's liquidity.

The situation for most banks had already been dire enough as a result of U.S. Treasury bills and government-backed mortgage securities positions, but the added pressure from the tech clients' outflows sent SVB over the edge. When it hit the news, the market reaction was instant, and the panic spread quickly. As the second largest bank failure in US history and the largest since the 2008 crisis, it justifiably raised widespread fears of contagion. The fact that Signature Bank followed days later only served as a further justification of those fears.

The US government's reaction was swift. The Biden administration sought to reassure investors and citizens alike that the American banking system and their deposits are in no real danger and that this is nothing like 2008. The government went as far as to announce they would be guaranteeing all deposits, even those above the standard $250,000 limit backed by Federal Deposit Insurance Corporation (FDIC). As investors and the public grew increasingly uneasy, the uptick in withdrawals started to become a real, existential concern for all banks, from regional ones to systemic ones. The up-until-now unthinkable threat of a nationwide bank run became a mainstream talking point - after all, the memories of the 2008 crisis are still too fresh. Treasury Secretary Yellen rushed to dispel public fears of a déjà vu of the last crisis, to highlight that this time is different, and that 'a major government bailout is not on the table'.

Still, none of what unfolded in the US comes anywhere close to the panic that the Credit Suisse collapse triggered. On March 14th, in its 2022 annual report, the bank revealed that it had identified 'material weaknesses' in its financial reporting over the past two years. Specifically, as the WSJ reported, 'As part of the annual report, PricewaterhouseCoopers, the bank's auditor, issued an adverse opinion on the effectiveness of its internal controls over financial reporting as of Dec. 31. PwC said the bank's control system for preparing consolidated financial statements had deficiencies, including ineffective controls over how non cash items were classified and presented in its consolidated cash flor statements.'

The revelation and its reverberations rippled around the world, as investor and public confidence was shaken, and as realistic fears of a systematic meltdown emerged. Credit Suisse stocks sank by 30% and caused a broader sell-off in European and US bank stocks. But once again, government and central banking officials acted swiftly, with the Swiss National Bank and the Swiss Financial Market Supervisory Authority (FINMA) scrambling to reassure investors and pledging unprecedented support to the 167-year-old bank, if it should be needed. And indeed, it was: hours after SNB announcement, Credit Suisse said it would take the offer of the central bank lifeline and that it planned to borrow as much as $54 billion.

However, none of this really convinced investors or managed to stem the bleeding from outflows and plummeting stock prices. What did help, however, was the subsequent announcement by rival banking giant UBS that will acquire Credit Suisse at a fire sale price of 3 billion Swiss francs ($3.2 billion), as part of a government-backed deal. As it emerged from later reports, the Swiss National Bank, FINMA and the minister of finance, Karin Keller-Sutter, all helped facilitate this rescue operation with great urgency and by applying a great deal of pressure on both sides. Even though the terms of the resulting 'shotgun wedding' are controversial, the deal so far seems to have reassured investors while creating a true, yet uncomfortable, banking behemoth.

Switzerland's credibility and reputation took a hit, but what many don't realise is that there already had been a decade's worth of mismanagement, overblown bonuses, and other issues at Credit Suisse. Since falling so far from what traditional Swiss private banking is still about, many Swiss have long abandoned even calling SC a 'Swiss' bank thanks to massive US concerns and involvement.

Fascinating as the events of the past few weeks have been, the most interesting part of this story is the one that received the least mainstream coverage. During the massive sell off, not only in the banking sector, but also where investors thought contagion could spread, and throughout the significant losses that equities suffered in general during this time, there was only one kind of investor that benefited. Precious metals prices shot up, after fears of a global banking crisis took hold. Gold breached $2,000 climbing to its highest level since March 2022, rising around 10% since the SVB run was made public.

This represents the latest real-life and indisputable confirmation that the world's oldest and most reliable safe haven still fulfils that role better than any other asset.