December 23 Market Scan: Precious metals rise to new highs, tech stocks ramp up AI deployment, yen volatility intensifies amid weak dollar

Global commodities usher in a “Golden Week,” with precious metals collectively breaking through key psychological levels. Driven by escalating geopolitical risks, rising expectations of Fed rate cuts, and a retreat in the US dollar index, the metals bull market is in full swing.

Precious Metals and Energy Rise Together

Gold broke through the $4400 mark, with the latest quote at $4443.9/oz, up 2.43%, hitting a new all-time high of $4449. Silver surged 2.82% to $69.44/oz, approaching the $70 psychological level. London copper futures also performed strongly, rising to $11,996.18 per ton, up 1.01%.

Notably, the “hidden winners” among precious metals—palladium and platinum—performed remarkably. Spot palladium reached a three-year high, touching $1800.85/oz, up 4.86%; spot platinum also hit a new peak, briefly reaching $2096.81/oz, up 6.07%.

On the energy front, WTI crude oil continued its upward trend, trading at $57.95 per barrel, up 2.49%, mainly supported by the lack of progress in US-Ukrainian peace negotiations.

US Stocks Rise for Three Consecutive Days with Christmas Rally Expectations

Market sentiment has significantly improved, with the three major US indices rising for the third consecutive day. Dow Jones up 0.47%, S&P 500 up 0.64%, Nasdaq up 0.52%, and China Gold Dragon Index also up 0.58%. The VIX fear index fell sharply by 5.5%, hitting a more than one-year low, as investors are optimistic about the market around Christmas.

European stocks mostly declined slightly, with the UK FTSE 100 down 0.32%, France CAC 40 down 0.37%, and Germany DAX 30 down 0.02%.

Tech Stocks Lead the Rally, AI Investment Hot Continues

Technology stocks continued to lead gains. Nvidia(Nvidia) closed up 1.5%, Tesla(Tesla) rose 1.6%, Oracle(Oracle) rebounded 3.3%, Micron(Micron) increased 4%, reflecting ongoing enthusiasm in the chip industry.

Google’s parent company Alphabet announced a major acquisition on Monday, reaching a final agreement to acquire data center and energy infrastructure company Intersect Power for $4.75 billion in cash, along with assuming related debt. This move signals increased investment by tech giants in AI infrastructure. Intersect owns $15 billion worth of operational and under-construction assets, with an expected capacity of 10.8 GW by 2028, more than 20 times the power generation of Hoover Dam. Alphabet CEO Sundar Pichai stated that this acquisition will help expand capacity and reimagine energy solutions, reflecting the market reality of surging demand for generative AI power.

Currency Fluctuations Intensify, Yen “Defense” Amid Dollar Depreciation

The US dollar index fell 0.48% to 98.24, continuing its weak trend. USD/JPY declined 0.44%, while EUR/USD rose 0.45%. Japanese Finance Minister Shunichi Suzuki issued the most severe warning yet about speculative yen volatility, stating that “bold actions” will be taken to address exchange rate movements inconsistent with fundamentals, implying intervention has been approved by the US. This comment highlights Japan’s awkward situation of a weakening yen despite rate hikes by the Bank of Japan, and draws new attention to exchange rates in emerging Asian markets, including MYR/JPY.

The US 10-year benchmark Treasury yield is approximately 4.16%, up 2 basis points from the previous trading day.

Cryptocurrency Slightly Adjusts, New Data Shows Slow Uptrend

Bitcoin(BTC) is at $92,660, down 0.99% in 24 hours. Ethereum(ETH) is at $3,250, up 2.21% in 24 hours. In Hong Kong stocks, the Hang Seng Index night futures closed at 25,909 points, 107 points higher than yesterday’s close of 25,801.

Macro Background: Rate Cut Expectations Rise, IMF Data Shows Decline in US Dollar Reserves

Federal Reserve Board member Stephen Miran(Stephen Miran) stated that if the Fed does not continue rate cuts next year, there is a risk of triggering an economic recession. Miran emphasized that rising unemployment should be a reason to continue rate cuts, maintaining a dovish stance since joining the Fed in September.

IMF data shows that in Q3, the global currency reserves’ US dollar share declined to 56.92%, down from 57.08% in Q2, while the euro’s share increased from 20.24% to 20.33%, and the yen’s share rose from 5.65% to 5.82%. This reflects that, under the impact of Trump’s tariff policies, central banks worldwide are slowly adjusting their foreign exchange reserve structures.

Goldman Sachs is optimistic about small-cap stocks and expects increased M&A opportunities

Goldman Sachs strategist Ben Snider predicts that the Russell 2000 index tracking US small-cap stocks will rise 10% next year, close to the 12% expected return of the S&P 500. He believes that changes in fiscal policy, accelerated AI applications, and increased M&A activity will bring numerous investment opportunities for small-cap stocks.