The Bear
Gold prices have surged above $1,950 per ounce due to subdued inflation pressures. However, despite Tuesday’s gains, an international bank holds a bearish outlook for the remainder of the year as the fear trade diminishes.
In his recent analysis, Bernard Dahdah, a precious metals analyst at Natixis, suggests that gold prices could drop by another 4%, bringing them below $1,900 per ounce. This projection is based on expectations of stabilization in geopolitical tensions in the Middle East, particularly as Israel’s conflict with Hamas remains localized within Gaza’s borders.
Despite the short-term bearish outlook, Dahdah anticipates long-term potential for gold extending into 2024 and 2025. He notes that even if a correction occurs, gold prices are likely to find support as the Federal Reserve begins cutting rates, possibly as early as May.
Dahdah states in the report, “Although we see gold prices retreating in the near term, behind a long-term cease-fire that will eventually come, prices will still average $1,883/oz in 2024 and rise to an average of $1,918/oz in 2025.”
As of the latest update, December gold futures traded at $1,968.10 per ounce, marking a nearly 1% increase for the day. Investors continue to analyze the most recent Consumer Price Index report, with Tuesday’s inflation data reinforcing expectations that the Federal Reserve is concluding its interest rate hikes in the current tightening cycle.
October’s CPI indicated a 3.2% increase in inflation over the past 12 months, representing the weakest rise since December 2021. The CME FedWatch Tool suggests a nearly 100% likelihood that the Federal Reserve will keep interest rates unchanged next month. Market expectations point to the first rate cut occurring in May, with a total of three rate cuts anticipated through the following year.
While the Federal Reserve has signaled the end of interest rate hikes, it remains committed to maintaining restrictive rates to ensure inflation aligns with its 2% target. Fed Chair Jerome Powell, speaking at an event hosted by the International Monetary Fund, stated that the committee is not confident it has done enough to bring inflation down. Powell emphasized the potential for further policy tightening if deemed necessary, expressing a cautious approach to balance economic data and the risk of overtightening.
The Bull
The robustness of the U.S. dollar has restrained gold prices throughout 2023, but according to Philip Petursson, Chief Investment Strategist at IG Wealth Management, the precious metal might be on the verge of a substantial breakout in the near future.
During a recent interview with BNN Bloomberg, Petursson expressed optimism, stating that even at the $2,000 per ounce mark, gold holds significant potential for an upward trajectory in the coming year.
“Gold has grappled with the strength of the U.S. dollar for the majority of this year,” Petursson noted. “They typically exhibit an inverse correlation, meaning as the U.S. dollar strengthens, gold tends to experience a slight weakening. Now, if we anticipate a softening of the U.S. dollar from this point forward—and that is our foundational expectation for 2024—that bodes well for gold.”
Petursson indicated that IG Wealth Management perceives gold as undervalued by as much as 20%. He anticipates that once gold overcomes the $2,000 barrier convincingly, it could potentially surge higher, reaching up to $2,400.
IG Wealth Management maintains a bullish outlook even if bond yields persist at multi-decade highs, and they remain optimistic about the U.S. economy achieving a soft landing without entering into a recession.
“As we navigate the remainder of 2023 and contemplate 2024, we maintain the perspective that higher bond yields will likely introduce some volatility into the equity markets,” Petursson stated in their 2023 third-quarter market review.
“Nevertheless, our economic outlook still leans toward a soft-landing scenario in the United States, fostering a cautiously optimistic outlook for equities over the next 12 months,” he added. “In the interim, fixed-income investors are poised to benefit from the overall increase in interest rates.”
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
