Good morning! LME copper futures prices have surpassed $12,000 per ton for the first time.
On Tuesday, U.S. stocks continued their upward momentum, with all three major indices extending gains for the fourth consecutive session. At the close, the S&P 500 rose 0.46% to 6,909.79, setting a new record high since December 11. The Dow Jones Industrial Average gained 0.16% to 48,442.41, while the Nasdaq Composite climbed 0.57% to 23,561.84.
Large-cap tech stocks led the rally, with Nvidia surging over 3%, Broadcom up more than 2%, and Google and Amazon each rising over 1%, helping the Nasdaq outperform the Dow and S&P 500. The "fear gauge" VIX continued to decline, closing at 14—its lowest level in a year.
Pre-market data from the U.S. Commerce Department showed that the country's GDP grew at an annualized rate of 4.3% in Q3, up from 3.8% in Q2 and exceeding market expectations of 3.2%.
According to CME's FedWatch Tool, the probability of a 25-basis-point rate cut by the Fed in January stands at 13.3%, while the likelihood of unchanged rates is 86.7%. By March, the chance of a cumulative 25-basis-point cut rises to 40.7%, with a 54.4% probability of no change and a 5.0% chance of a 50-basis-point reduction.
Gold and silver prices continued their record-breaking rally. COMEX gold futures rose 1.02% to $4,515 per ounce, while silver futures surged 4.44% to $71.61 per ounce. Spot platinum gained 7.46% to $2,289.54, and palladium climbed 4.43% to $1,857.46.
LME copper futures rose $136 to $12,060 per ton, marking the first time prices breached the $12,000 threshold and setting a new all-time high. Aluminum futures dipped $2 to $2,939, zinc edged up $8 to $3,094, lead gained $11 to $1,982, nickel jumped $463 to $15,739, while tin fell $155 to $42,792.
WTI February crude futures settled at $58.38 per barrel, up over 5.89% since December 16. Brent February crude closed at $62.38, rising more than 5.86% over the same period.
**Trump: Fed Chair Must Align With His Views** On December 23, former U.S. President Donald Trump stated that anyone who disagrees with his views would never lead the Federal Reserve. He emphasized that he wants a Fed chair who cuts rates when markets perform well, rather than "unnecessarily" disrupting them.
Current Fed Chair Jerome Powell's term expires in May next year. Under U.S. law, the president nominates the Fed chair, subject to Senate approval. Despite facing persistent criticism from Trump over rate decisions, Powell has refused to resign, stressing the Fed's policy independence.
Trump recently named former Fed Governor Kevin Warsh as a top contender for the role, alongside White House National Economic Council Director Kevin Hassett.
**Outlook for Precious Metals** The global precious metals market has seen a sharp rally, with gold and silver prices hitting historic highs. Copper and other non-ferrous metals with strong financial attributes have also surged. Analysts attribute this uptrend to liquidity from accommodative monetary policies.
"Fed Chair Powell's dovish signals—including a 25-basis-point rate cut and an unexpected $40 billion monthly bond-buying program—have fueled the rally," said Pu Zulin, chief macro analyst at Zhengxin Futures.
Wang Jun, chief expert at Green Dahua, noted that gold prices have soared over 68% year-to-date, outperforming stocks, bonds, and other assets. This reflects the dual reinforcement of precious metals' commodity and financial properties amid shifting global economic dynamics.
Unlike historical cycles, gold prices have risen alongside elevated U.S. 10-year Treasury real yields. Pu explained this anomaly stems from emerging markets diversifying reserves away from the dollar and rising retail demand for physical gold. Additionally, the current "easy money + fiscal stimulus" policy mix echoes the 1970s–80s, stoking inflation fears and boosting gold's appeal as a hedge.
Wu Zijie, a precious metals analyst at Jinrui Futures, highlighted the "dual-engine" rally: gold and silver's strength despite high real yields signals deep-seated dollar skepticism, while silver's outperformance over crude oil underscores its resurgent monetary and industrial roles in green energy.
Wang Jun added that demand is now driven by a "three-pillar" structure—central bank purchases, institutional investment, and industrial use—while supply constraints (with gold reserves depleting by 2032 at current rates) provide long-term price support.
Short-term drivers include financial conditions and geopolitical risks, while long-term trends hinge on monetary debasement and reduced dollar reliance. However, Pu cautioned that AI-driven demand and China's economic recovery could influence future price trajectories.
Wang projected gold prices to trade between $4,200–$4,700 in the near term, with silver following suit. Long-term structural factors—scarcity, central bank accumulation, and tech demand—could push gold to $5,000, a 13.6% upside.
Key risks include tighter financial conditions, stalled AI advancements, or a stronger-than-expected U.S. inflation rebound.
