Gold price to see wild $100+ daily gains, Bitcoin rally to follow, if Middle East tensions escalate and spillover into 'unmitigated disaster' – Larry Lepard

Turmoil in the Middle East is keeping investors on edge, and gold is one of the first assets to react — rising above the critical psychological level of $2,000 an ounce and trading near 2.5-month highs on Friday.

It won’t be surprising to see gold witness daily gains of $100+ as the Israel-Hamas war escalates, Larry Lepard, Managing Partner and Founder of Equity Management Associates, told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News.

"Gold has gone up a lot in a very short period of time," Lepard said Thursday. "And that’s a combination of the war and also sniffing out the underlying problem in the bond market. When geopolitical trouble arises, gold tends to smell it first."

Gold has gained over $160 since the terrorist group Hamas attacked Israel on October 7, killing more than 1,400 people, mostly civilians. Since then, the conflict has been escalating, with gold crossing the $2,000 an ounce level Friday and December Comex gold futures last trading at $2,005.90, up 1.28% on the day.

Markets are digesting the latest developments ahead of another uncertain weekend, including the Pentagon stating that the U.S. Navy warship intercepted three cruise missiles and several drones launched by the Iran-aligned Houthi movement from Yemen. Also, Iran called for an embargo against Israel, including an oil embargo on the country. Iran has also warned that if Israel proceeds with a ground operation into Gaza to retaliate against Hamas and rescue the hostages, it will activate its terrorist proxy groups on multiple fronts.

There is a 20% chance that this conflict will escalate into an "unmitigated disaster," said Lepard, with economic consequences that would "probably be bigger than 2008, and it's probably bigger than in 2020. What could happen that would be bigger than those two things? It'd be a really major war. It doesn't strike me as impossible," he pointed out.

The United States has been living in a false narrative that everything is well. But the regional banks still have $600 billion of commercial real estate losses, according to Lepard.

"You know something is going to break, and then it's going to cascade very similar to the way it did in 2008," Lepard described. "It would be an unmitigated disaster. And I don't think there's any way the Federal Reserve wouldn't be called upon to quote-unquote do the patriotic thing and print the money necessary to keep the system going, inflation be damned."

This could mean a major stock market selloff between 30% and 50%. For gold, this would translate into $100+ daily price moves, with Bitcoin likely following at some point.

Lepard envisions similar-sized price moves as in March 2020 after the Federal Reserve stepped in to support the U.S. economy, and gold surged, hitting record highs. "Gold went up a hundred dollars a day, two days back to back. You never see that. And that's what would happen again this time. So I think everybody has to be prepared for that," Lepard noted.

  The monetary system today: 'Council of elders deciding the price of money' – Lyn Alden

Best-case and worst-case scenarios

Even in the best-case scenario, in which the Israel-Hamas war does not escalate into a major regional conflict or a WWIII-type situation, gold is looking to hit $2,500 an ounce after it goes through $2,100, Lepard told Kitco News.

"Gold will get through $2,100, which is a very important level. And when it goes through that, people will chase a new all-time high. We'll be at $2,500, maybe even $3,000," he said. "Assuming an absolute best case in the war, we're still screwed monetarily and economically."

Bitcoin will also likely catch the safe-haven bid and follow gold’s rally. "My target for mid to the tail-end of next year is $2,500 to $3,000 gold and $50k-$100k Bitcoin," he added. "That’s assuming a best case scenario in the war — that things calm down and nothing gets worse."

To learn when Bitcoin is likely to start rallying, watch the video above.

At the same time, the worst-case scenario, in which the Israel-Hamas conflict turns into a major war, is not all that implausible either, according to Lepard.

The Fed’s easing cycle is near, what it means for markets

There's a high probability that the Fed is done hiking because the bond market is signaling that something is close to breaking, Lepard said.

The yield on the benchmark 10-year Treasury, which moves inversely to prices, is trading above 4.9% — a level last seen in 2007.

"The Fed knows that if they continue to raise rates, they're going to break the bond market. They may have already broken it, but they're going to break it to the point that it's irreparable. So I think what we're moving towards is monetary easing," Lepard said. "And that's what gold smells. Gold also smells war, and gold always goes up when there's instability."

Watch the video above to get Lepard’s take on the Fed’s next step and what the central bank’s Chair Jerome Powell is afraid of going into the year-end.

Lepard also explores the idea of sound money and which safe haven assets are the best to hold during heightened geopolitical uncertainty and makes the case for Bitcoin as well as gold. Watch the video above for details.

By

Anna Golubova

For Kitco New

Time to Buy Gold and Silver

David

Gold Price News: Gold Leaps Ahead on Heightened Risk Aversion

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Gold continues to rally strongly, with recent gains taking the price to a three-month high of $1,979 per ounce. For now, the appetite for safe-haven assets is trumping stiff rate headwinds.

Market drivers for gold remain under significant tension. US economic data is still largely beating expectations, helping to sustain inflation and higher interest rates to combat it. US rates continue to climb with 10-year US Treasury yields now testing 5% – a level not seen since mid-2007. This is clearly a challenge for non-yielding assets, such as gold.

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However, the risk environment also remains elevated. Geopolitical risk has risen in the Middle East. However, the muted rise in crude oil prices thus far suggests that the market is still pricing in a low probability of Iran being drawn directly into the regional conflict. As such, the risks here still arguably lie to the upside. Equity markets are also uneasy, with the VIX (‘Fear’) Index of implied S&P 500 volatility at the highest levels since the US banking scare in March.

In the meantime, the much-awaited speech by Fed Chairman Powell has done little to move the dial. While the probability of a rate pause until the end of 2023 seems to have improved, the chances of one last rate hike in Q1 2024 have hardly moved. Until greater clarity, bonds will be handicapped in their ability to attract safe-haven flows from gold.

Time to Buy Gold and Silver

David

Gold a bit firmer as Fed Chair Powell on deck

Gold prices are slightly up and near the daily high, while silver is modestly down in midday U.S. trading Thursday. The markets are seeing some price consolidation following recent solid gains. Mild profit-taking from the shorter-term futures traders was featured in earlier trading. Still-keener risk aversion in the general marketplace as the Middle East crisis continues to play out will very likely keep a floor under the two safe-haven metals for at least the near term. December gold was last up $2.20 at $1,970.60 and December silver was down $0.079 at $23.01.

The U.S. marketplace highlight of the day Thursday is the midday speech by Federal Reserve Chairman Jerome Powell to the Economic Club of New York. Powell’s remarks will be closely scrutinized by the marketplace, to see if he wavers from his heretofore hawkish tone on U.S. monetary policy.

Rising bond yields and high tensions in the Middle East are squelching the equities market bulls late this week. Reports said Hamas is firing more missiles into Israel. This comes after an explosion at a Gaza hospital killed over 500 people earlier this week. U.S. and Israeli intelligence say the explosion was caused by Palestinian militants.

Asian and European stocks were mostly lower overnight. U.S. stock indexes are slightly down at midday. Downbeat quarterly earnings from EV maker Tesla has dampened Wall Street spirits Thursday.

  Time to increase allocation to gold – JPMorgan's Kolanovic

The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are slightly up and trading around $88.50 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is closing in on 5.0% and is presently fetching around 4.9%.

Technically, December gold futures prices hit a six-week high Wednesday. Recent price action suggests that a market bottom is in place. The bulls have the slight overall near-term technical advantage. A five-month-old price downtrend on the daily bar chart has been negated and prices are now trending higher. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,875.00. First resistance is seen at this week’s high of $1,975.80 and then at the August high of $1,980.20. First support is seen at today’s low of $1,957.00 and then at $1,950.00. Wyckoff's Market Rating: 5.5.

December silver futures bulls have the slight overall near-term technical advantage. A three-month-old downtrend on the daily bar chart has been negated and prices are now trending up. Recent price action suggests a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $21.60. First resistance is seen at today’s high of $23.185 and then at this week’s high of $23.49. Next support is seen at today’s low of $22.785 and then at this week’s low of $22.535. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 45 points at 359.15 cents today. Prices closed near mid-range today. The copper bears have the solid overall near-term technical advantage. Prices are in a choppy, 2.5-month-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 378.60 cents. The next downside price objective for the bears is closing prices below solid technical support at 340.00 cents. First resistance is seen at this week’s high of 363.05 cents and then at 367.45 cents. First support is seen at this week’s low of 353.15 cents and then at 350.00 cents. Wyckoff's Market Rating: 1.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Sharp gains for gold on better safe-haven bidding

Gold prices are solidly higher and hit a six-week high in midday U.S. trading Wednesday. Silver prices are slightly up and scored a three-week high. Keener risk aversion in the marketplace as the Middle East violence is flaring up has traders and investors seeking out safe-haven assets like gold and silver. December gold was last up $26.70 at $1,962.40 and December silver was up $0.016 at $23.04.

Risk aversion has up-ticked at mid-week after a bombing at a hospital in Gaza has reportedly killed over 500 people. Hamas blamed an Israel air strike, while Israel blamed an errant Hamas missile. Reports said U.S. military intelligence says the explosion was caused by a Palestinian military group. Reads a Barrons headline today: “Rate fears, bond yields, war; market concern grows.”

U.S. stock indexes are lower at midday.

In overnight news, China got some mixed economic data today. China's third-quarter GDP came in at up 4.9%, year-on-year, helped by resilient consumer spending. However, China's third-quarter GDP came in below the second quarter's reading of up 6.3%, year-on-year. That puts the world's second-largest economy on course to hit an annual GDP target of around 5% for 2023, Bloomberg reported. GDP got a boost from strong retail sales in September that posted the biggest increase since May. On the downside, China property investment contraction accelerated during September. Home sales continued to decline and construction of new homes dropped almost 24% in the first nine months of the year. Funding for property development dropped 13.5%, year-on-year.

Off the record: silver looks better than gold in 2024 according to LBMA survey

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher and trading around $88.00 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching around 4.85%.

Technically, December gold futures prices hit a six-week high today. Recent price action suggests that a market bottom is in place. The bulls have gained the slight overall near-term technical advantage. A five-month-old price downtrend on the daily bar chart has been negated and prices are now trending higher. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,875.00. First resistance is seen at today's high of $1,975.80 and then at the August high of $1,980.20. First support is seen at $1,950.00 and then at today's low of $1,935.90. Wyckoff's Market Rating: 5.5.

December silver futures prices hit a three-week high early on today. The silver bulls have the slight overall near-term technical advantage. A three-month-old downtrend is in place on the daily bar chart has been negated and prices are now trending up. Recent price action suggests a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $21.60. First resistance is seen at today's high of $23.49 and then at $23.80. Next support is seen at today's low of $22.84 and then at this week's low of $22.535. Wyckoff's Market Rating: 5.5.

December N.Y. copper closed up 25 points at 358.10 cents today. Prices closed nearer the session low today. The copper bears have the solid overall near-term technical advantage. Prices are in a choppy, 2.5-month-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 378.60 cents. The next downside price objective for the bears is closing prices below solid technical support at 340.00 cents. First resistance is seen at today's high of 363.05 cents and then at 367.45 cents. First support is seen at this week's low of 353.15 cents and then at 350.00 cents. Wyckoff's Market Rating: 1.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold, silver firmer despite hotter U.S. CPI and rising bond yields

Gold and silver prices are a bit higher in midday U.S. trading Tuesday. The precious metals bulls are holding their own despite a stronger-than-expected U.S. retail sales report and rising U.S. Treasury yields this week. December gold was last up $1.80 at $1,936.10 and December silver was up $0.23 at $22.995.

The gold market lost some of its overnight gains in early U.S. trading when the U.S. retail sales report for September showed a much-stronger-than-expected gain of 0.7% on the month, versus market expectations for a 0.3% rise. The report boosted U.S. Treasury yields and falls into the camp of the U.S. monetary policy hawks, who want to see more interest rate increases in the coming months.

Asian and European stocks were mostly higher overnight. U.S. stock indexes are lightly lower at midday. While the Israeli-Hamas war remains near the front burner of the marketplace, there have been no major, markets-moving developments over the past week. Traders and investors are starting to focus more on other, more normal economic and business factors that are impacting the marketplace, such as economic reports, earnings reports and central bank rhetoric. But make no mistake, the Middle East conflict will not just fade away and there are likely to be markets-moving surprises develop in the coming days and weeks.

  Rising tail risks in the market warrant holding more than 6% of your portfolio in gold – BIS' Zöllner

The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil prices are near steady and trading around $86.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 4.819%.

Technically, December gold futures see recent price action suggesting a market bottom is in place. However, the bears still have the overall near-term technical advantage. A five-month-old price downtrend is in place on the daily bar chart, but just barely. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the October low of $1,823.50. First resistance is seen at last week's high of $1,946.20 and then at $1,950.00. First support is seen at this week's low of $1,921.20 and then at $1,913.60. Wyckoff's Market Rating: 3.5.

December silver futures prices hit a three-week high today and scored a bullish “outside day” up. The silver bears have the slight overall near-term technical advantage. A three-month-old downtrend is in place on the daily bar chart, but just barely. Recent price action suggests a market bottom is in place. Silver bulls' next upside price objective is closing prices above solid technical resistance at $24.00. The next downside price objective for the bears is closing prices below solid support at $21.60. First resistance is seen at today's high of $23.18 and then at $23.50. Next support is seen at today's low of $22.535 and then at $22.25. Wyckoff's Market Rating: 4.0.

December N.Y. copper closed down 70 points at 357.50 cents today. Prices closed nearer the session high and hit a nearly 12-month low early on today. The copper bears have the solid overall near-term technical advantage. Prices are in a choppy, 2.5-month-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 378.60 cents. The next downside price objective for the bears is closing prices below solid technical support at 340.00 cents. First resistance is seen at this week's high of 360.55 cents and then at 365.00 cents. First support is seen at today's low of 353.15 cents and then at 350.00 cents. Wyckoff's Market Rating: 1.5.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold is a better diversifier when bonds are this correlated to stocks – TheStreet's Dierking

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Bonds are no longer a very good diversifier as they have become too correlated with equities, making gold and other commodities a superior choice, according to David Dierking, Editor of ETF Focus at TheStreet.

Dierking noted that investors who stuck with the classic 60/40 portfolio over the past couple of years have suffered, as “only a 100/0 portfolio really had a chance at generating positive returns.” And while 5% yields on Treasury bills have looked very attractive recently, long-term Treasury bonds are down 45% from their 2020 peak.

“As the Fed has executed the most aggressive rate hiking cycle in history, it’s lifted bond market volatility to historically high levels,” he said.

Dierking points out that the last time the bond market was this volatile was during the financial crisis, and this volatility has remained elevated for a year and a half. “I probably don’t need to tell you that when market volatility is at 15-year highs and has been that way for the past six quarters, nothing good usually comes of it,” he said.

With inflation still a problem, bond market volatility will likely remain high along with yields, so going heavily into Treasuries and cash isn’t the best move, he said, and investors should consider rotating part of their portfolio into gold and other commodities instead.

“Treasuries have a long history of acting as a great diversifier to stocks (the past two years notwithstanding),” Dierking wrote. “Their low correlation to other riskier asset classes helps to reduce overall portfolio risk and smooth out some of the volatility that occurs on a regular basis in the financial markets.”

But he said gold and commodities do the same thing, perhaps even better. “Gold has virtually no correlation at all to stocks, making it perhaps the ultimate diversifier,” he said. “Commodities also have a low correlation to stocks, but their price movements are often based more heavily on where we are in the market cycle.”

Dierking shows the relative performance of stocks, bonds, gold and commodities over the past 15 years.

“The historical absolute returns of each asset class aren’t what’s important here since the future is likely to look very different,” he said. “What’s much less likely to change are risk levels and inter-asset correlations. Equity correlation to both bonds and gold, historically, have been very low and the correlation to commodities, while higher, is still at the level where there is significant diversification benefits.”

Dierking wrote that the problem is that stocks and bonds are much more correlated today than in the past, perhaps as high as 0.80. “Plus, when that high correlation is associated with downside risk, it makes the portfolio construction decision that much more complicated,” he said. “While the stock/bond correlation is likely to return to the long-term average eventually, but the short-term solution may be to substitute the temporarily high correlation of bonds for the low correlation of gold and commodities.”

 

To test this, Dierking created three simulated portfolios: Portfolio #1 holds 100% U.S. Stock Market, Portfolio #2 is 80% U.S. Stock Market and 20% U.S. Bond Market, and Portfolio #3 contains 60% U.S. Stock Market, 20% U.S. Bond Market, 10% Gold, and 10% Commodities.

“You may ask why I would take the 20% away from stocks in Portfolio #3 instead of bonds,” he said. “The answer is that I believe we will soon enter a period where safe haven assets begin behaving like safe haven assets again. That likely comes with the onset of a potential recession in the next couple of quarters. If that happens, the higher return potential will be with bonds, not stocks.”

Dierking then back tests the three portfolios over the past 16 years.

“The all-stock portfolio produced better returns on an absolute basis than did the more diversified portfolios, but it also came with much more risk,” he noted. “The 60/20/10/10 portfolio lagged the 100/0 portfolio by about 2% annually, but it was also about 30% less volatile. Its maximum drawdown over the measurement period was also only about 2/3 of the all-stock portfolio.”

Dierking said that the most interesting finding was the comparative risk-adjusted returns. “The Sharpe and Sortino ratios for the 100/0 and 60/20/10/10 portfolios are virtually identical, which means that they’ve delivered the same amount of return for each unit of risk,” he said. “The more diversified portfolio just dials things back by about 30%.”

He added that this remains true when annual returns are analyzed. “There’s a very consistent pattern (with just a few outliers) where the gain/loss on the 60/20/10/10 portfolio is less than that of the other two,” he said.

Dierking wrote that while investors are always looking for ways to maximize returns, most don’t realize that they can get those returns while minimizing downside risk. “Losing less is just as valuable as gaining more,” he said. “If we are indeed trending towards a recessionary environment, the lower risk factor of the 60/20/10/10 portfolio could be incredibly valuable.”

By

Ernest Hoffman

For Kitco News

Time to Buy Gold and Silver

David

Gold Price News: Gold Consolidates As Middle East Conflict Boosts Haven Appeal

Once again, gold has confirmed its key role as a safe haven amid market uncertainty.

Growing geopolitical concerns from escalating tensions in Israel and Gaza increased investors’ demand for bullion and pushed the price higher. In the last few days, gold has been supported by dovish remarks from Federal Reserve key speakers, after months of hawkish rhetoric and rate hikes.

gold kau on kinesis exchange

The temporary weakness of the greenback and the decline of yields are also supportive factors for gold. As a result, yesterday we saw the precious metal extending its gains and consolidating above the support zone of $1,850.

For the time being, the next key resistance zone, at $1,890, remains relatively far away, with the gold price currently steady around $1,860. Although from a technical perspective, the scenario has improved.

The gold spot price has shown resilience remaining above the $1,850 threshold in the last 24 hours, while volatility has declined. Investors are now waiting for the release of the minutes from today’s Federal Open Market Committee (FOMC), and US inflation data, which will be released tomorrow. The reports are forecast to show a decline from 3.7% to 3.6%.

A confirmation of these expectations could reinforce the notion that a peak in interest rates for this cycle has been reached – or at least, is extremely near. This is all supportive of gold.

Time to Buy Gold and Silver

David

Gold, silver a bit weaker following warm U.S. inflation report

Gold and silver prices are slightly down in midday U.S. trading Thursday, following a U.S. consumer inflation reading that was just a bit higher than expected. The markets also saw routine corrective pullbacks from recent price gains. December gold was last down $2.90 at $1,884.20 and December silver was down $0.183 at $21.95.

Focus today was on a key U.S. inflation report: the consumer price index report for September. The CPI rose by 3.7% compared to the previous year–higher than the consensus estimate of up 3.6%. On a monthly basis, consumer prices advanced by 0.4%, easing from a 0.6% gain in August but exceeding market expectations of 0.3%. Core CPI, excluding food and energy prices, also increased by 0.3% for the month and 4.1% on a 12-month basis, aligning with expectations. It marked the lowest reading since September 2021. The slightly warmer-than-expected CPI reading today slightly dented bullish enthusiasm in the precious metals markets. Still, the safe-haven bid amid the elevated Middle East tensions is likely to at least keep a floor under gold and silver prices.

Asian and European stocks were mostly higher overnight. U.S. stock indexes are mixed at midday. The U.S. stock indexes this week are “climbing a wall of worry” as the turmoil in the Middle East is on the front burner of the marketplace.

  September sell-off presents buying opportunity for gold investors – WGC

The key outside markets today see the U.S. dollar index solidly higher, which was also a daily negative for the metals. Nymex crude oil prices are slightly higher and trading around $83.75 a barrel. The yield on the benchmark U.S. Treasury 10-year note yield is presently fetching 4.651%.

Technically, December gold futures still see very early clues that a market bottom is in place. However, the bears still have the firm overall near-term technical advantage. A five-month-old price downtrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00. First resistance is seen at $1,900.00 and then at $1,913.60. First support is seen at Wednesday’s low of $1,871.70 and then at this week’s low of $1,857.50. Wyckoff's Market Rating: 3.0

December silver futures prices scored a bearish “outside day” down today. The silver bears have the overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00. The next downside price objective for the bears is closing prices below solid support at the March low of $20.615. First resistance is seen at today’s high of $22.39 and then at $22.555. Next support is seen at this week’s low of $21.705 and then at $21.50. Wyckoff's Market Rating: 3.0.

December N.Y. copper closed down 215 points at 359.05 cents today. Prices closed nearer the session low. The copper bears have the solid overall near-term technical advantage. Prices are in a choppy, two-month-old downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at last week’s high of 378.60 cents. The next downside price objective for the bears is closing prices below solid technical support at 350.00 cents. First resistance is seen at this week’s high of 367.45 cents and then at 370.00 cents. First support is seen at today’s low of 358.35 cents and then at the October low of 354.90 cents. Wyckoff's Market Rating: 2.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

David

Gold prices holding near one-week high as FOMC minutes support 'higher for longer' interest rates

The gold market is holding solid gains even as the minutes of the Federal Reserve's September monetary policy meeting show that the central bank is committed to maintaining a "higher for longer" monetary policy stance.

Although the Federal Reserve is nearing the end of its tightening cycle, the minutes showed that the committee continues to support elevated interest rates until it is confident that inflation is falling back to the 2% target.

"All participants agreed that policy should remain restrictive for some time until the Committee is confident that inflation is moving down sustainably toward its objective," the minutes said. "Several participants commented that, with the policy rate likely at or near its peak, the focus of monetary policy decisions and communications should shift from how high to raise the policy rate to how long to hold the policy rate at restrictive levels."

The gold market is not seeing much reaction to the latest minutes. December gold futures last traded at $1,885.50 an ounce, up 0.54% on the day.

The gold market continues to be well supported due to renewed safe-haven demand as investors remained focused on the growing chaos in the Middle East and the new war between Israel and Hamas.

Although the Federal Reserve is expected to maintain restrictive monetary policies for the foreseeable future, the minutes also show the committee recognizes the difficult path that lies ahead.

"Many participants commented that even though economic activity had been resilient and the labor market had remained strong, there continued to be downside risks to economic activity and upside risks to the unemployment rate," the minutes said. "Participants generally noted that it was important to balance the risk of overtightening against the risk of insufficient tightening."

Despite the Federal Reserve's relatively hawkish stance, markets expect that the Federal Reserve will leave interest rates unchanged next month. According to the CME FedWatch Tool, markets see a less than 10% chance of a 25-basis point hike.

Andrew Hunter, deputy chief U.S. economist at Capital Economics, said that he expects that the Fed's tightening cycle has ended.

"With several officials this week suggesting that higher yields could reduce the need for further rate hikes, we think it is increasingly likely that the Fed's next move will be a cut. We expect that to come in the first half of next year, with rapidly falling inflation and weak economic growth convincing officials to cut rates by 200bp in total by end-2024," he said in a note following the release of the minutes.

By

Neils Christensen

For Kitco News

Time to Buy Gold and Silver

David