Gold sold off post-FOMC as the market was hoping for a dovish hike and instead got a clearly hawkish message. The vote was 12-0 to raise rates 25 bps, and the dot plot was also hawkish. Glenn Youngkin, former Republican Governor of Virginia and former co-CEO of the Carlyle Group, gave the keynote speech. My two major takeaways:

Iran/Middle East Youngkin believes we need a resolution to the Iran/Middle East crisis — no surprise there. The big question, obviously, is timing. His view was that somewhere within the next 6–12 months we could see a resolution, and that when we do, U.S. interest rates could be lower than they are today. He also polled the audience on gold. The majority said they would be buyers at current levels, relatively no one said they would be sellers, and the rest would do nothing.
The November 3 U.S. elections Youngkin also discussed the uncertainty over which party will control the House after the November 3 elections and the potential implications for legislation. My takeaway from his comments was that there is considerable uncertainty ahead of the election and reason to be cautious about making major portfolio decisions before the results are known. As you know, I am a big proponent of patience. On the market side, in conversations with several banks, I heard that EFP positions have been greatly reduced because of increased volatility and higher VAR. We have been seeing this volatility build over the last few months, with major intraday moves, including gold EFP swings of $2.00 in a day, along with large outright price moves. Today, gold and silver are up slightly following yesterday’s selloff. I also understand there is significant GLD open interest close to the market again, with approximately 48,000 Sept. 18 $400 calls outstanding. That could have some influence on near-term price action as expiration approaches. However, with so much headline risk, I continue to advocate patience. For informational purposes only. Not investment advice.