After stabilising and regaining some ground yesterday, precious metals are falling very strongly again as markets approach the end of 2025.
- Eyes are on precious metals today as we are still seeing wild gyrations in this asset class, which has clearly signified an end to the recent extremely strong bullish trend. They are again falling sharply, since today's Asian session began:
- Silver fell by almost 7%, with the spot metal trading near crucial lows at $70. If this round number breaks down, it could drop all the way to $50 quite quickly.
- Platinum is down by more than 11%, and has now wiped out more than half the gains it made since its bullish breakout a couple of weeks ago.
- Palladium is down by over 7%, and has lost about one quarter of its value in only three trading days.
- Gold is seeing a much lower level of volatility, but we are also seeing another firm fall here, with the price down by and trading below the $4,300 handle.
- These huge drops show that it is wise to respect huge increases in volatility when they happen. What soars higher, is also likely to crash lower.
- Stock markets are moving lower. We see an orderly reversal in the S&P 500 Index which points to lower prices being likely here today.
- The US Federal Reserve, or to be more precise the FOMC, released the minutes of its recent policy meeting, which showed that while most of the decision-makers see further rate cuts as appropriate as long as its supported by declining inflation, they are still divided about the timing and extent of cuts. However, the CME FedWatch tool shows that markets are still expecting only two rate cuts over 2026, although these are expected by the midpoint of the year. Despite the talk about rate cuts, the US Dollar Index continues to rise, modestly but firmly.
- In the Forex market, since today's Tokyo open, the strongest major currency has been the Australian Dollar, and the weakest has been the New Zealand Dollar, although the market is relatively quiet as we approach the New Year holiday. The USD/ZAR currency pair traded at a new 3-year low price earlier today. The USD/JPY currency pair has been in a technical long-term trend for quite a while, but now seems to be moving higher more decisively.
- The Iranian Rial has reached a new all-time low, not helped by the Iranian government's public posture towards rebuilding its nuclear and ballistic missile programs after they were partly destroyed by Israel and the USA last June, and President Trump and Prime Minister Netanyahu's public declarations to the effect that they will take military action if Iran does rebuild. Protests are ongoing in Iran, focused on small business owners, but analysts tend to see the Islamic Republic surviving.
- There will be a public holiday today in Germany.
- Most markets will be closed tomorrow for the New Year's Day holiday, and some markets will be closed Friday also.
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