Factors Behind Silver & Gold's Volatile Trade, Fed Chair Talks

Metals Market - The recent sell-off in the metals market was attributed to rumors that the CME raised margin rates on futures for some metals, leading to increased holding costs for positions [2][4] - Following the margin rate increase, some investors may have added funds to their accounts to cover the increased margin, while others likely reduced their positions [2][4] Federal Open Market Committee (FOMC) Insights - The FOMC meeting held on December 9th and 10th revealed significant dissent among members regarding interest rate cuts, with some advocating for a 50 basis point cut while others opposed any cuts [6][7] - The Fed ultimately decided on a 25 basis point cut, ended quantitative tightening, and began repurchasing short-term treasuries, indicating a potential shift towards quantitative easing [7][8] - The summary of economic projections from the meeting showed an upgrade in GDP forecasts, a reduction in inflation forecasts for 2025 and 2026, and an unchanged unemployment forecast, suggesting a balanced approach to inflation and labor market concerns [8][9] Housing Market Data - Recent housing data indicated a 3.3% increase in pending home sales, signaling potential recovery in the housing market [14] - The K Schiller home price index showed mixed results, with a month-over-month increase of 0.4% (adjusted) and a year-over-year increase of 1.3%, which was better than consensus but slightly worse than the previous month [15][16] - The FHFA house price index reported a month-over-month increase of 4% and a year-over-year increase of 1.7%, indicating positive trends in housing prices [16]