Precious metals are being sold off, and crude oil is steadily rising—year-end market volatility is increasing, and investors should pay attention to Federal Reserve decisions.

Commodity Market Turmoil, Precious Metals Fall Across the Board

On the last trading day of the year, the commodity market experienced extreme volatility. CME Group significantly increased margin requirements for recent popular futures contracts and their corresponding settlement price trading contracts (TAS), fueling risk aversion in the market. As a result, the precious metals sector faced a collective sell-off—gold once dropped over $200, touching a low of $4,302 per ounce, and ultimately closed down 4.42% at $4,332.2 per ounce; silver plunged 9%, palladium fell more than 17%, and platinum declined over 15%. This wave of decline is considered a “Black Monday” level correction.

FOMC Chair Nominee Announcement Pending, Market Expectations Shift

The leadership change at the Federal Reserve has become a focal point for the market. The new chair is expected to be announced in January next year, and this anticipation has directly impacted risk assets. Investors are focusing on the FOMC minutes released this Tuesday, seeking clues about future policy directions. The 10-year U.S. Treasury yield fell back to 4.1%, down 2 basis points from the previous trading day.

Stock Markets Under Pressure, Tech Stocks Lead Decline

Faced with the dual impact of a sharp drop in precious metals and policy uncertainty, the major U.S. stock indices generally declined. The Dow Jones fell 0.51%, the S&P 500 declined 0.35%, and the Nasdaq dropped 0.5%. Tech giants like NVIDIA closed down 1.2%, data analytics firm Palantir decreased 2.4%, and electric vehicle manufacturer Tesla saw the largest decline of 3.3%. Financial stocks also suffered—Goldman Sachs fell 1.6%, American Express and JPMorgan Chase both declined over 1%. Silver mining stocks Coeur dropped 4.4%, and Hecla decreased 4.9%.

European markets showed mixed results. The UK FTSE 100 slightly declined by 0.04%, France’s CAC 40 rose 0.1%, and Germany’s DAX 30 increased marginally by 0.05%.

Oil Prices Rise Against the Trend, Indicating Market Divergence

Contrary to the plunge in precious metals, the oil market demonstrated resilience. WTI crude oil rose 1.58%, trading at $57.8 per barrel, reflecting ongoing support for energy demand outlooks. Oil price movements reflect dynamic supply and demand expectations; amid rising global economic uncertainty, crude oil trends continue to influence investor sentiment.

Forex and Crypto Assets Experience Slight Fluctuations

The US dollar index dipped 0.04% to 98.0, USD/JPY declined 0.34%. EUR/USD edged up slightly by 0.01%. In the crypto space, Bitcoin fell 0.89% within 24 hours, currently at $87,085; Ethereum decreased 0.61%, now at $2,931.07.

Central Banks Continue Rate Normalization

The Bank of Japan released the summary of opinions from its December policy meeting, with most policymakers indicating the need for further rate hikes. The summary shows that, due to inflation-adjusted real interest rates remaining negative, there is still a considerable distance from the neutral rate. Some members suggested raising rates at a monthly pace, while others emphasized that timely increases could help curb future inflation pressures. The BOJ raised its policy rate from 0.5% to 0.75% during the December 18-19 meeting, reaching a 30-year high.

Tech M&A Wave Continues, Industry Consolidation Accelerates

SoftBank Group announced it will acquire digital infrastructure investment firm DigitalBridge Group for $4 billion, at $16 per share, a 15% premium over its Friday closing price. As of the end of September, DigitalBridge managed assets worth $108 billion, making it one of the largest dedicated investors in the digital ecosystem, with operations spanning data centers, fiber networks, and edge infrastructure.

The semiconductor sector also sees a wave of strategic investments. A leading AI chip designer has purchased over 214.7 million shares of Intel via private placement, totaling $5 billion, further strengthening Intel’s financing support for capacity expansion. This investment has also received approval from the U.S. Federal Trade Commission.

Key Data Overview

Market Outlook

Year-end market volatility reflects multiple intertwined factors—FOMC policy expectations adjustments, geopolitical shifts, and re-pricing of commodity supply and demand. Investors should closely monitor the FOMC minutes and pay attention to oil price fluctuations and their impact on inflation expectations. In an environment of rising uncertainty, the significant swings in precious metals may signal a market re-evaluation of future risks.