Gold and other precious metals under the dawn of peace: "losses"? Diversified asset performance highlights the complex market landscape

Optimistic expectations for peace negotiations are rewriting the recent trajectory of safe-haven assets. As negotiations between the US and Ukraine make tangible progress, the safe-haven aura in the international gold market is gradually fading. This wave of adjustment deeply reflects the market tug-of-war caused by the intertwined current geopolitical and economic expectations.

How Geopolitical Shifts Are Moving the Precious Metals Nerve

Recent positive signals from US special envoy and Ukrainian negotiation representatives have directly impacted the market’s risk sentiment. US Special Envoy Vitkov stated that there have been “many progress” in negotiations, while Ukrainian negotiation leader Umerov also confirmed that the talks over the past two days were “constructive” and achieved “substantive progress.” Such statements from key conflict parties quickly elicited clear reactions at the market level.

On December 15, COMEX February gold futures closed with a modest increase of $6.9, up 0.2%, at $4,335.2 per ounce. The early session spike of up to 1% was quickly retracted, with spot gold quoted at $4,305 per ounce. This rapid shift in sentiment clearly indicates that market expectations for peace have begun to suppress gold’s safe-haven appeal.

The “Winning or Losing” in Precious Metals

Interestingly, gold’s adjustment contrasted sharply with the performance of other precious metals. Market data on December 15 showed a divergent picture:

Silver COMEX March futures rose 2.6%, closing at $63.589 per ounce, outperforming gold. Platinum NYMEX January futures increased 3.0%, closing at $1,815.9 per ounce. Palladium NYMEX March futures even rose 5.2%, closing at $1,623.1 per ounce.

The logic behind this difference is that gold mainly carries financial safe-haven attributes, while silver, platinum, and palladium also have industrial application value. Therefore, they respond to different fundamental factors. When geopolitical safe-haven demand wanes, these multifunctional precious metals are supported by industrial demand and other market factors, showing stronger price resilience.

Complex Picture of the Base Metals Market

Copper prices performed well supported by a weakening US dollar. LME 3-month copper rose 1.16%, closing at $11,686 per ton; COMEX March copper also increased 1%, closing at $5.4120 per pound. The US dollar index fell 0.15% on the 15th, closing at 98.25 points, providing strong support for copper prices.

However, the performance of other base metals was mixed. LME aluminum futures were flat, while lead and zinc futures declined by varying degrees. Nickel futures fell the most, by 2.22%. This reflects divergent market expectations for different base metals’ fundamentals. Last week, copper hit a historical high of $11,952 per ton amid supply concerns, but this week, it was sold off due to worries related to AI concept stocks, with volatility significantly amplified.

Macroeconomic Data and Policy Expectations as Turning Points

This week’s intensive economic data releases are causing traders to adopt a wait-and-see stance. Several key economic indicators delayed by the government shutdown will be released this week: November non-farm payrolls and October retail sales data on December 16; November Consumer Price Index (CPI) on December 18.

Economists forecast that November non-farm payrolls will increase by only 50,000, far below September’s 119,000, which will be a key factor in the Fed’s policy outlook. Before these “data anchors” materialize, the market broadly adopts a strategy of reducing directional bets.

The latest data from CME FedWatch tool shows that as of the 15th, the probability of the Federal Reserve cutting interest rates by one quarter to the 3.25%-3.50% range by January 28, 2026, is 24.4%, while the probability of holding rates steady is as high as 75.6%. This reflects a market expectation of a relatively subdued policy shift in the near term, despite some anticipation of longer-term easing.

When Will the Market’s Calm Break?

Currently, precious metals and base metals markets are at a balancing point. Progress in peace negotiations has weakened traditional safe-haven demand, but economic data uncertainties and policy outlook variables provide new supporting logic. As key economic data are released this week and further geopolitical negotiation news emerges, the market will break the current wait-and-see pattern, and each category may face new directional choices.