Safe-Haven Demand Lifts Gold and Silver as the Dollar Ends Its Winning Streak

Market Overview

On Monday, U.S. equity markets experienced a dramatic intraday reversal. News that the U.S. Department of Justice was reportedly investigating Federal Reserve Chair Jerome Powell triggered a sharp “triple sell-off” across equities, bonds, and the U.S. dollar at the open. However, markets quickly absorbed the headline risk, with both U.S. stocks and Treasuries rebounding strongly from their intraday lows.

The S&P 500 erased earlier losses to close at a fresh all-time high, while small-cap stocks outperformed. On the corporate front, Google confirmed a multi-year AI technology partnership with Apple, pushing its market capitalization above USD 4 trillion for the first time. In contrast, financial stocks came under pressure after President Trump called for a cap on credit card interest rates at 10%, sending Capital One shares down nearly 8% and American Express lower by more than 4%.

From a macro and FX perspective, renewed concerns over the Federal Reserve‘s independence brought an end to the dollar’s recent rally, with the DXY falling as much as 0.6% from its intraday high. U.S. Treasury yields closed slightly higher but remained well below early-session peaks, with the 10-year yield up just 1 basis point on the day.

Safe-haven demand combined with a weaker dollar drove a sharp surge in precious metals. Spot gold jumped nearly 2%, briefly breaking above USD 4,600 per ounce, while silver delivered an even more aggressive move, soaring 7.6% in a single session.

In other asset classes, energy prices advanced on heightened Iran-related geopolitical risks, with WTI crude oil settling up 1.8%. Bitcoin fluctuated within a roughly 2.6% intraday range, holding near elevated levels and remaining largely range-bound.

Key Themes to Watch

● U.S. Q4 Earnings Season Kicks Off

Goldman Sachs notes that consensus expectations point to a 7% year-over-year increase in S&P 500 earnings per share for the fourth quarter. However, this estimate may once again prove conservative, as the index has exceeded consensus earnings forecasts in every quarter since Q1 2023. This weeks bank earnings will serve as a critical market barometer, with JPMorgan set to report results on Tuesday.

● Trump: 25% Tariffs on Countries Trading with Iran, Oil Prices React

On the 12th, U.S. President Donald Trump stated on social media that any country conducting business with Iran would face a 25% tariff on all trade with the United States, effective immediately. Following the announcement, international oil prices moved higher. Brent crude futures rose more than 1.4% to USD 64.23 per barrel, while WTI crude futures gained 1.27% to USD 59.69 per barrel.

Key Economic Events (GMT+8)

• 19:00 (US) – December NFIB Small Business Optimism Index

• 21:30 (US) – December CPI (YoY, MoM), Core CPI (YoY, MoM, seasonally adjusted)

• 23:00 (US) – Remarks by 2028 FOMC voter and St. Louis Fed President Musalem; October New Home Sales (annualized)

Overnight

• 01:00 (US) – EIA Monthly Short-Term Energy Outlook Report