Core Viewpoint - DBS Bank's report indicates a "high possibility" of the Federal Reserve (Fed) cutting interest rates again in December, despite recent balanced communication from the Fed [1] Group 1: Interest Rate Decisions - The Fed is expected to face political pressure and initial employment market signals that may lead to another rate cut in December [1] - Following the rate cut in October, Fed officials have adopted a cautious stance, with hawkish views suggesting that substantial deterioration in the labor market and significant easing of inflation are necessary for further loosening [1][2] - DBS analysts believe the threshold for further easing is relatively low due to political realities and corporate layoffs [1] Group 2: Quantitative Tightening (QT) and Monetary Policy - The Fed has announced it will stop its quantitative tightening (QT) program on December 1, which has been in place for three years [1] - There is broad consensus among Fed officials regarding the end of QT, driven by the need for more bank reserves to maintain stability in the financial system [2] - DBS expects the Fed to continue reducing its holdings of mortgage-backed securities (MBS) while reinvesting the proceeds into U.S. Treasury securities [2] - If rising repo rates do not decline in the coming months, the Fed may begin asset purchases to prevent further declines in reserves, indicating a potential return to quantitative easing (QE) [2]

Core Insights - Bitcoin's recent dip below $100,000 tested investor confidence, but it quickly rebounded, establishing a new psychological support level [1] - Analysts generally maintain a bullish outlook for Bitcoin despite short-term volatility, with the US government shutdown seen as a significant price constraint [1] Group 1: Market Analysis - PlanB views the recent correction as a mid-cycle pause, noting that Bitcoin has remained above $100,000 for six consecutive months, indicating a shift from resistance to support [2] - PlanB anticipates that the next major price movement could target the range of $250,000 to $500,000, contingent on Bitcoin's divergence from its realized price [4] Group 2: Liquidity Dynamics - Arthur Hayes links Bitcoin's short-term weakness to tightening US dollar liquidity, attributing this to the increase in the Treasury General Account (TGA) since the US debt ceiling was raised [5] - Hayes predicts that once the US government reopens and reduces its TGA balance, it will initiate a "stealth QE," indirectly injecting liquidity into the market [5] - Raoul Pal's liquidity model supports this view, indicating that the current phase is a "Window of Pain," but he expects a sharp reversal in liquidity conditions soon [6]

Core Viewpoint - The Federal Reserve is approaching a new phase of "liquidity replenishment" after two years of balance sheet reduction, rather than a return to quantitative easing [1][2]. Group 1: Federal Reserve's Strategy - The Federal Reserve may soon consider expanding its securities holdings to maintain bank reserves at "adequate levels," which does not indicate a change in the fundamental stance of monetary policy [2][5]. - The next step in the Fed's balance sheet strategy involves assessing whether reserve levels have transitioned from "slightly above adequate" to "adequate" [2]. Group 2: Market Conditions - Recent fluctuations in the repo market indicate a transition of liquidity from "ample" to "adequate," with some repo rates exceeding the Fed's target range, reflecting increased demand for short-term funds [4]. - The usage of the Standing Repo Facility (SRF) has surged, reaching the highest frequency since its establishment in 2021, with borrowing exceeding $10 billion on multiple occasions [4]. Group 3: Future Expectations - Market analysts anticipate that the Fed may initiate "reserve management" bond purchases in the first quarter of 2026 to maintain liquidity in the banking system [5]. - The Fed is closely monitoring indicators such as the federal funds market, repo market, and payment systems to evaluate changes in reserve demand [5].

Core Viewpoint - The US stock market, particularly large technology stocks, is experiencing a significant sell-off, driven by concerns over high valuations and negative economic signals, including warnings about the impact of a government shutdown on GDP growth [2][4]. Group 1: Market Performance - Major US stock indices opened lower, with the Nasdaq down 1.3%, S&P 500 down 0.76%, and Dow Jones down 0.47% [3]. - Large tech stocks such as Nvidia, Tesla, Oracle, and AMD fell over 3%, while semiconductor stocks also faced declines, with the Philadelphia Semiconductor Index dropping over 2% [3]. - The cryptocurrency market is also under pressure, with Bitcoin dropping over 2% and Ethereum down nearly 4%, leading to significant liquidations totaling $710 million in the last 24 hours [3]. Group 2: Economic Concerns - The US government shutdown has led to the absence of key economic data, including the October non-farm payroll report, raising concerns about the Federal Reserve's decision-making for interest rates [4]. - The shutdown is expected to have a more severe impact on the economy than previously anticipated, particularly affecting the tourism and leisure sectors [4]. - Analysts suggest that once the government reopens and tariff issues are resolved, there may still be hope for a year-end market rebound [4]. Group 3: Federal Reserve Actions - Federal Reserve officials, including New York Fed President Williams, indicated that the Fed may soon need to purchase bonds to expand its balance sheet to meet liquidity demands in the financial system [5][6]. - Williams emphasized that any future bond purchases would be for liquidity management and not indicative of a new round of quantitative easing [6]. - The Fed's recent decision to end its balance sheet reduction program is seen as a response to rising market interest rates and liquidity pressures [5].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The prices of gold and silver showed a trend of rising first and then falling this month, and are currently in a consolidation phase, but there is still strong support below. The Fed's hawkish stance on monetary policy has put significant pressure on the market's expectations of the Fed's interest rate cuts, causing the previous strong performance of gold and silver prices to slow down. However, Powell's statement on the balance sheet is a key turning point, and the expansion of the Fed's balance sheet in the future provides a solid reason, which has a more significant driving effect on precious metal prices. It is recommended to go long on silver on dips, with the reference operating range of the main contract of Shanghai gold being 880 - 966 yuan/gram, and that of the main contract of Shanghai silver being 11,001 - 12,366 yuan/kilogram [11]. Summary by Directory 1. Monthly Assessment and Market Outlook - **Market Performance**: From October 9 to November 6, 2025, the main contract of COMEX gold fell 1.9% to $3,984.8 per ounce, reaching a record high of $4,398 per ounce during the session. The main contract of Shanghai gold rose slightly by 0.86% to 917.8 yuan/gram, reaching a record high of 1,001.96 yuan/gram during the session. The main contract of COMEX silver fell slightly by 1.25% to $47.845 per ounce, reaching a record high of $53.765 per ounce during the session. The main contract of Shanghai silver rose 2.03% to 11,427 yuan/kilogram, reaching a record high of 12,366 yuan/kilogram during the session [11][29]. - **Fed's Monetary Policy**: In the October FOMC meeting, Powell carried out a "hawkish rate cut", lowering the policy rate by 25bps to 3.75% - 4.00%, while expressing a hawkish stance on the subsequent interest rate path. The Fed's hawkish statements have put significant pressure on the market's expectations of interest rate cuts. However, Powell's statement on ending the balance sheet reduction on December 1st provides a solid reason for the subsequent expansion of the Fed's balance sheet, which is a strong driving force for the rise of gold and silver prices [11]. - **Precious Metals Sector**: The structural tightness of overseas silver spot cannot be completely resolved. China's photovoltaic silver demand is resilient, and India's silver imports are expected to rebound in the fourth quarter. The gold - silver ratio as of November 7 was 82.3, significantly higher than the historical average of 62 since 1971. It is recommended to go long on silver on dips [11]. - **Technical Analysis**: The Shanghai gold index has turned out of the downward trend and is currently consolidating in the range of 900 - 930 yuan/gram. It is expected to maintain a volatile pattern, and it is advisable to buy on dips at the lower edge of the range. The technical chart of Shanghai silver is significantly stronger than that of Shanghai gold, forming a relatively strong ascending triangle consolidation pattern after turning out of the downward trend. In the short term, it will still maintain a volatile trend [15][16]. 2. Market Review - **Price and Position Changes**: COMEX gold and silver prices showed a trend of rising first and then falling this month. The total position of Shanghai gold decreased by 21.3% to 336,200 lots, and the total position of Shanghai silver decreased by 12.15% to 688,800 lots. As of the latest report period on September 23, the net long position of COMEX gold managed funds increased by 1,578 lots to 160,500 lots, and the net long position of COMEX silver managed funds increased by 1,293 lots to 37,000 lots. Due to the US government shutdown, some data such as COMEX gold and silver CFTC total positions and managed funds' net positions have not been updated [29][32][35][37]. - **ETF Holdings**: As of November 5, the total holdings of gold ETFs within the Reuters statistical scope were 2,309.6 tons, and the total holdings of overseas silver ETFs were 27,892.1 tons [40]. 3. Interest Rates and Liquidity - **Interest Rate Indicators**: The report presents multiple interest rate - related charts, including the spread between 10 - year and 2 - year US Treasury bonds, short - term US Treasury yields, the federal funds rate, overnight reverse repurchase rate, 10 - year nominal interest rate, real interest rate, and inflation expectations [49][52]. - **Fed's Balance Sheet**: The Fed's balance sheet shows changes in various items. Due to the US government shutdown, the balance of the US Treasury's TGA account has risen significantly to $94.27 billion, and the deposit reserve balance has decreased to $2.85 trillion [54][57]. 4. Macroeconomic Data - **Inflation Data**: In September, the year - on - year value of US CPI was 3%, lower than the expected 3.1% and the previous value of 2.9%. The month - on - month value was 0.3%, lower than the expected and previous value of 0.4%. The year - on - year value of core CPI was 3%, lower than the expected and previous value of 3.1%, and the month - on - month value was 0.2%, lower than the previous value of 0.3% [62]. - **Employment Data**: Due to the US government shutdown, the latest weekly unemployment data in the US is missing [65]. - **PMI and PPI Data**: In October, the US ISM manufacturing PMI was 48.7, lower than the expected 49.5 and the previous value of 49.1; the ISM non - manufacturing PMI was 52.4, higher than the expected 50.8 and the previous value of 50 [68]. - **Housing Data**: In August, the annualized value of new home sales in the US was 800,000 units, significantly higher than the previous value of 664,000 units. The annualized value of building permits was 1.33 million units, and the annualized value of new housing starts was 1.307 million units [71]. 5. Precious Metals Spreads - **Gold Basis**: The report presents the charts of gold TD - SHFE basis, showing the changes in the basis over time [74][75]. - **Silver Basis**: The report presents the charts of silver TD - SHFE basis, showing the changes in the basis over time [77][78]. - **Domestic - Foreign Spreads**: The report presents the charts of domestic - foreign spreads of gold and silver, showing the changes in the spreads over time [81][83]. 6. Precious Metals Inventories - **Silver Inventories**: The report presents the inventory charts of silver in multiple markets, including the total inventory of Shanghai Gold Exchange, Shanghai Futures Exchange, and COMEX, as well as the inventories of individual exchanges [88][90]. - **Gold Inventories**: The report presents the inventory charts of COMEX gold and LBMA gold [92].

Core Viewpoint - The founder of Bridgewater Associates, Ray Dalio, warns that the U.S. may have entered a dangerous phase characterized by "stimulating in a bubble" as the Federal Reserve shifts from quantitative tightening to quantitative easing, which he argues is more than just a technical adjustment [1] Group 1: Economic Conditions - Dalio highlights that the current economic environment is marked by high asset valuations, stable job growth, and inflation slightly above target, contrasting it with previous quantitative easing measures that were aimed at financial downturns [1] - He notes that the combination of high fiscal deficits and an expanding balance sheet could lead to a "monetization of government debt" if interest rates continue to be lowered [1] Group 2: Market Implications - The potential for a bubble in private credit and high valuations in the stock market, particularly in sectors like AI, raises concerns that the Federal Reserve's actions may be stimulating these bubbles [1] - Dalio warns that excessive money printing and bond purchases by the central bank could suppress returns on bonds and stocks, leading to a "liquidity melt-up" scenario that could create market pressures [1] Group 3: Investment Recommendations - Investors are advised to closely monitor the Federal Reserve's balance sheet and policies, as well as the impact of capital flows on asset valuations, to navigate potential risks prudently [1]

Core Viewpoint - The tightening of the money market is expected to persist until November, with increasing pressure on the Federal Reserve to support liquidity before halting balance sheet reduction next month [2][3]. Group 1: Market Conditions - The Secured Overnight Financing Rate (SOFR) surged by 18 basis points last Friday, marking the largest single-day increase since the Fed's rate hike cycle began in March 2020 [2]. - Despite a slight retreat on Monday, SOFR remains above key policy benchmarks like the federal funds rate, indicating ongoing liquidity issues in the market [2]. - Other short-term rates in the overnight repurchase market continue to trade above the Fed's managed rates, reflecting persistent funding pressures [2]. Group 2: Federal Reserve Actions - The Federal Reserve announced it will stop reducing its holdings of Treasury securities in December, ending a three-year quantitative tightening effort due to increasing liquidity constraints [3]. - There are internal disagreements within the Fed regarding the timing of asset purchases, with some officials advocating for a minimal balance sheet while others suggest increasing reserves to keep pace with the banking system and economic growth [3][4]. - Recent data shows bank reserves have fallen to $2.8 trillion, the lowest level since September 2020, raising concerns about market distortions [3]. Group 3: Interest Rate Dynamics - Dallas Fed President Logan indicated that if repo rates remain high, the Fed will need to purchase assets, expressing disappointment over the three-party repo rates exceeding the Fed's standing repo facility rate [4]. - The SOFR was 32 basis points higher than the reserve balance rate last Friday, the largest spread since 2020, although it fell to 4.13% on Monday, still above the current reserve balance rate of 3.9% [4]. - The pressure in the tri-party market may be more severe than indicated by published rates, prompting calls for the Fed to take more aggressive actions, including purchasing Treasury securities [4][5]. Group 4: Historical Context and Future Implications - The current situation may reflect greater fragility in overnight financing rates compared to 2019, with large hedge funds holding approximately $1 trillion more in Treasury long positions than six years ago [5]. - The use of repo financing has nearly doubled since then, suggesting that similar actions to those taken in 2019, where the Fed injected $500 billion into the market, may be necessary to alleviate pressure during Treasury settlement periods or critical payment dates [5].

Group 1: Market Reactions and Trends - The financial market experienced an unusual reaction in late October, with gold prices rising despite positive trade developments between China and the U.S. [1][3] - Gold prices surged over 3% within three trading days following the trade announcement, breaking the $2900 per ounce mark, contrary to traditional expectations [3][5] - The rise in gold prices is attributed to its role as a warning signal regarding potential risks in the monetary credit system, rather than just geopolitical tensions [5][7] Group 2: Federal Reserve Actions - The Federal Reserve announced an unexpected early termination of its balance sheet reduction, moving the date from January 2026 to December 2025, indicating rising liquidity pressures in the market [9][11] - The reduction in bank reserves, which fell to $2.93 trillion in October, approached the Fed's lower threshold of $2.5-3 trillion, prompting the decision to halt the balance sheet reduction [11][13] - The Fed's actions reflect lessons learned from past financial crises, aiming to prevent a repeat of liquidity issues experienced in 2019 [13][15] Group 3: Financial System Vulnerabilities - The tightening liquidity environment has exposed vulnerabilities within the financial system, with rising non-performing loan rates among regional banks [15][17] - The U.S. Treasury's increased issuance of short-term debt to cover fiscal deficits has further strained bank reserves, contributing to a cycle of rising financing costs and reduced risk tolerance among smaller banks [17][19] - The Fed's strategy to shift funds from mortgage-backed securities to short-term Treasury bonds aims to enhance the stability of the financial system while preparing for potential future liquidity needs [19][21] Group 4: Global Market Implications - The Fed's decision to halt balance sheet reduction has provided relief to emerging markets, with a decrease in the dollar index and a narrowing of dollar bond spreads [21][23] - However, commodity markets have shown mixed reactions, with gold prices rising due to ongoing demand for currency credit hedging, while oil and industrial metals remain under pressure from weak global economic recovery expectations [21][25] - The ongoing adjustments in monetary policy and market dynamics suggest a need for investors to focus on long-term trends amidst short-term volatility [25]

Core Viewpoint - The recent drop in gold prices, exceeding 5% in a single day, is attributed not to the easing of the Russia-Ukraine conflict but to underlying liquidity issues in the financial market, signaling a potential shift in market dynamics [3][22]. Group 1: Market Liquidity and Financial Signals - The spike in the secured overnight financing rate (SOFR) from 2.43% to over 9% indicates a sudden liquidity crunch in the market, reminiscent of past financial crises [7]. - The usage of the Standing Repo Facility (SRF) has surged, with operations exceeding $5 billion for three consecutive days, highlighting a significant liquidity shortage [8][9]. - The private credit market is showing signs of risk, with borrowing levels reaching $1.7 trillion, comparable to nearly 10% of the U.S. Treasury market, raising concerns about regulatory oversight [11]. Group 2: Household Debt and Economic Strain - U.S. household debt has reached a historic high of $18.4 trillion, echoing levels seen before the 2008 financial crisis [13]. - Increasing delinquency rates in credit cards and auto loans suggest that consumers are facing financial strain, leading to reduced disposable income [14]. Group 3: Gold as an Investment - Gold's price movements are more closely tied to liquidity conditions than to geopolitical tensions, making it a "hard currency" that is often sold off during liquidity crises [18][20]. - Historical patterns show that after liquidity crises, such as the 2008 financial collapse and the onset of the COVID-19 pandemic, gold prices tend to recover significantly once central banks inject liquidity into the market [22]. - The current downturn in gold prices is viewed as a temporary reaction to liquidity issues, with potential for recovery as central banks are expected to ease monetary policy [23][25]. Group 4: Investment Strategy and Risk Management - For long-term investors, the current dip in gold prices may present a buying opportunity, given the anticipated trend of global central bank easing and ongoing geopolitical uncertainties [25]. - Investors are advised to maintain liquidity and diversify their portfolios to mitigate risks associated with market volatility, as even traditionally safe assets like gold can experience significant fluctuations [27][29][32].

Core Viewpoint - The recent bullish trend in the U.S. stock market is facing warnings from analysts, indicating potential risks of a market correction by the end of December, with the S&P 500 index possibly declining by 5% from its peak [1][3][4]. Market Sentiment and Indicators - Ed Yardeni, a prominent analyst, highlighted that the bullish sentiment among investors has reached extreme levels, with the ratio of bulls to bears rising to 4.27, surpassing the critical threshold of 4.00, which historically signals excessive optimism [4]. - The S&P 500 index has surged by 37% since early April, marking one of the longest bullish runs since 1950, with similar patterns occurring only five times in the past [4]. - The Nasdaq 100 index is trading 17% above its 200-day moving average, indicating a significant price gap that suggests the current rally may be overextended [5]. Liquidity Concerns - The U.S. financial system is showing signs of liquidity stress, with the Secured Overnight Financing Rate (SOFR) rising by 18 basis points to 4.22%, the largest single-day increase in a year [7][8]. - The usage of the Federal Reserve's Standing Repo Facility (SRF) reached a historical high of $50.35 billion, indicating increasing reliance on liquidity support tools [7][8]. - The liquidity crisis is exacerbated by the U.S. government shutdown, which has drained market liquidity significantly, with the Treasury's cash balance increasing from $300 billion to $1 trillion over three months [8]. Potential Market Reactions - Analysts suggest that if the government reopens, it could lead to a rapid normalization of the repo market and a rebound in risk assets, as the Treasury would inject billions back into the market [9]. - Major financial institutions like Goldman Sachs and Citigroup anticipate that the government shutdown may end within two weeks, potentially leading to a significant influx of cash into the market [9].