Is this just the start for gold and silver?

[View this email in your browser]( [Youtube]( [Kitco Metals]( Editor's Picks [@neils_C]( We have entered the final stretch of 2023 and while I would like to say that it has been a wild ride, it has mostly been fairly dull, as [gold]( didn’t do much through much of the year. We have spilled a lot of digital ink and spent a lot of time telling investors they need to be patient. We have noted the market’s resilience many times as prices have held critical support levels while the Federal Reserve has aggressively raised rates. Well, that patience finally paid off as gold's true luster has started to shine. After hitting a record monthly close in November, the precious metal has since set new all-time highs, with February futures ending the week around $2,090 an ounce. The precious metal finished the week with a healthy gain of more than 4%. Gold prices have been propelled higher as markets price in a potential rate cut as early as March. At the start of the week, markets saw a roughly 25% chance of a rate cut by the end of the first quarter of 2024. Heading into the weekend, those expectations have jumped to 52.5%. [It’s also interesting that the market stopped listening to the central bank, as Fed Chair Powell has made it fairly clear that interest rates are not going anywhere anytime soon.]( However, [Axel Merk, President and Chief Investment Officer at Merk Investments, was able to put the current market environment into perspective.]( He noted that although the Federal Reserve continues to talk tough, the economy continues to slow down, and it is clear the central bank is done raising interest rates. He added that the worst-case scenario is that the Fed keeps interest rates higher for a little longer than expected. But ultimately, the next move will be a cut. "The market is always forward-looking, so we don’t actually need the Fed to start cutting rates for gold to move. There just needs to be the perception that it will happen,” Merk said. “People are buying gold because they believe the downward pressure on rates is coming.” Although gold is attracting the most attention, let’s not forget about silver as prices have traded at their highest levels since July, with [March silver futures]( ending the week at $25.895 an ounce. Although silver is underperforming gold ahead of the weekend, it has been playing catch-up through most of November. The gold/silver ratio is currently hovering around 81 points, its lowest level since mid-August. Analysts have said that a rally in silver would be a signal that higher gold prices are sustainable. There is a lot of optimism for silver as the market continues to see record industrial demand. Many analysts have noted that silver continues to be fairly cheap compared to gold, as the ratio still remains well above the historical average range between 50 and 60 points. TD Securities is one of the most bullish on the white metal as they see prices pushing to $26 an ounce by the second quarter of next year. While gold and silver investors can celebrate this weekend, let’s not forget that the market does look a little overstretched, so we could see some selling pressure next week For now, though, enjoy the ATH, and have a great weekend. Neils C. 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