Gold Hits Record Highs as Tech Fuels Market Rally

Market Overview

U.S. equities shrugged off an early pullback on Wednesday, extending gains for a fourth consecutive session with strong support from mega-cap technology stocks. The S&P 500 closed at a new all-time high, while NVIDIA surged 3% on renewed optimism surrounding semiconductor tariff developments. Among the “Magnificent Seven,” only Tesla posted a modest decline, slipping 0.6%.

In Europe, Novo Nordisk jumped more than 9% after its oral weight-loss drug received regulatory approval in the United States, lifting broader market sentiment. The pan-European equity index recorded its third record high in four sessions. Meanwhile, France passed a short-term budget bill to avert a government shutdown, pushing French 10-year government bond yields lower and outperforming other European sovereign debt.

On the macro front, U.S. third-quarter GDP surprised to the upside, significantly dampening expectations for near-term rate cuts. Following the data release, U.S. Treasury prices struggled to rebound, with yields briefly touching their highest levels in nearly two weeks. The U.S. dollar index also pared earlier losses and hovered near intraday highs.

Volatility was notable across FX and crypto markets. The offshore Chinese yuan continued its strong run, hitting a 14-month high and breaking below 7.02 per dollar intraday for the first time in over a year. The Japanese yen rebounded for a second straight session after officials signaled potential intervention. Cryptocurrencies pulled back, with Bitcoin slipping below USD 87,000 intraday, down more than 2% from session highs.

Commodities extended their remarkable rally, with gold, silver, and copper all printing fresh record highs. LME copper climbed above USD 12,000 per metric ton for the first time in history. Although spot gold and silver briefly sold off following the GDP release, both quickly stabilized, with silver at one point posting gains close to 4%. Crude oil rose for a fifth consecutive session after the U.S. reaffirmed sanctions on Venezuelan oil trade, bringing the five-day cumulative gain to nearly 6% and marking the highest level in almost two weeks.

Key Themes to WatchU.S. GDP Surges 4.3%, Fastest Pace in Two YearsConsumer Confidence Falls for a Fifth Straight Month

U.S. real GDP expanded at an annualized 4.3% in the third quarter, marking the fastest growth rate in two years, driven primarily by robust household consumption. Due to the government shutdown, the data release followed a streamlined publication process. While core inflation remains elevated at 2.9%, easing expectations around tariff policies have buoyed market sentiment. The Federal Reserve may therefore slow the pace of rate cuts next year should economic momentum remain strong.

Recent data highlight a clear divergence between consumers and businesses. Persistent weakness in consumer confidence reflects heightened concerns over prices and job security, leading households to rein in discretionary spending. In contrast, the Richmond Fed Manufacturing Index, although still in contraction territory, improved sharply from -15 to -7. More importantly, business expectations for activity, new orders, and employment over the next six months all turned decisively positive, signaling rapidly improving confidence in the medium-term outlook.

Gold and Silver Hit New Records, On Track for Biggest Annual Gains Since 1979

Gold and silver prices surged to fresh all-time highs amid escalating geopolitical tensions and expectations of further U.S. monetary easing. Traders are increasingly betting that, following three consecutive rate cuts, the Federal Reserve may deliver additional easing next year, a supportive backdrop for non-yielding precious metals.

Geopolitical risks have further reinforced golds safe-haven appeal over the past week, particularly surrounding developments in Venezuela. The United States has imposed blockades on Venezuelan oil tankers and continues to intensify pressure on the government of President Nicolás Maduro, adding another layer of uncertainty to global markets.

Events to Watch (GMT+8)

21:30 U.S. Initial Jobless Claims for the Week Ending December 20 (in thousands)