Safe-Haven Demand and Rate-Cut Expectations Resonate, Gold Hits New Record Highs

Market Overview

U.S. equities extended their rally yesterday, led once again by strength in technology stocks. All three major indices recorded a third consecutive gain, effectively marking the start of the so-called “Santa Claus rally.” The S&P 500 climbed to within striking distance of its all-time high. Tesla surged nearly 4% intraday, setting another record high in less than a week. Nvidia rebounded 1.5%, while Micron Technology continued to benefit from strong earnings momentum, posting cumulative gains of over 20% across three sessions.

M&A speculation continued to stir the media sector, lifting shares of both Paramount and Warner. In contrast, Dominion Energy fell nearly 4% against the broader market trend after the Trump administration halted one of its offshore wind projects on national security grounds.

On the macro front, weak demand at a U.S. two-year Treasury auction pushed yields higher. The U.S. dollar index snapped its recent winning streak and retreated to a one-week low. The Japanese yen reversed last Fridays losses following renewed signals of potential official intervention from senior Japanese officials. Offshore renminbi strength stood out, with USD/CNH breaking below the 7.03 level intraday for the first time in 14 months.

Commodities entered a historic phase, with gold, silver, and copper all hitting record highs simultaneously. Heightened safe-haven demand combined with rising expectations of interest rate cuts drove gold up more than 2% intraday, marking a fresh all-time high for the first time in two months and reclaiming levels above USD 4,300. Silver and copper also extended their record-setting rallies for a second consecutive session. Crude oil rose for a fourth straight day, gaining nearly 3% intraday to a one-week high on reports that the U.S. may tighten restrictions on Venezuelan oil exports. In cryptocurrencies, Bitcoin briefly climbed above the USD 90,000 mark before paring some of its gains.

Key Themes Ahead

● Japans Finance Minister Issues Currency Warning

Japans finance minister warned that authorities retain “discretionary power” to act against exchange rate movements that diverge from economic fundamentals, signaling that the threshold for intervention may have received tacit approval from the U.S. Combined with aggressive fiscal stimulus from the Kishida administration pushing Japanese government bond yields to a 27-year high, markets are increasingly pricing in the risk of renewed intervention should volatility intensify. As of Monday evening, USD/JPY was hovering around the 157.49 level.

● San Francisco Blackout Disrupts Waymo, Sparks Autonomous Driving Debate

A major power outage in San Francisco forced Waymo‘s autonomous vehicles to halt operations after traffic signals and infrastructure guidance went offline, exposing vulnerabilities in the “high-definition maps plus rule-based” approach under extreme conditions. Elon Musk seized the opportunity to contrast Tesla’s “vision-only” strategy, reigniting debate over competing technological paths. The incident has intensified public and regulatory concerns over the safety, reliability, and scalability of autonomous driving, becoming a critical stress test for industry credibility.

Key Events to Watch (GMT+8)

21:30 (US)

• U.S. Q3 Annualized GDP (Advance)

• U.S. Q3 Annualized Personal Consumption Expenditures (Advance)

• U.S. Q3 Core PCE Price Index, Annualized (Advance)

• U.S. October Durable Goods Orders (MoM)

22:15 (US)

• U.S. November Industrial Production (MoM)

23:00 (US)

• U.S. December Conference Board Consumer Confidence Index

• U.S. December Richmond Fed Manufacturing Index

• UN Security Council meeting on Irans nuclear program