Crude Oil Plunges 4% as Gold and Silver Retreat from Record Highs

Market Overview

U.S. equities snapped a two-day losing streak on Tuesday, led by renewed strength in the semiconductor sector. A series of upbeat earnings reports reignited enthusiasm across the AI theme, lifting the chip index nearly 2%. Heavyweights including Micron Technology, NVIDIA, and ASML advanced broadly.

Financials also outperformed. Following earnings releases, Goldman Sachs, Morgan Stanley, and BlackRock each rallied approximately 5%–6%.

On the macro front, a surprise decline in initial jobless claims reinforced the view that the U.S. labor market remains resilient. Treasury yields accelerated higher, while the U.S. dollar index rebounded to a more than six-week high.

Foreign exchange markets showed notable divergence. Despite broad dollar strength, the offshore renminbi demonstrated strong internal momentum, breaking below 6.97 intraday and marking its strongest level in roughly 20 months.

Cryptocurrencies cooled after recent gains, with Bitcoin retreating from intraday highs and slipping back below USD 96,000.

Commodities experienced sharp rotation.

Metals lose momentum: The previously overheated rallies in gold, silver, copper, and tin paused, with prices retreating from record levels. Spot gold fell more than 1%, while silver at one point plunged over 7% intraday before futures rebounded into positive territory. LME tin declined nearly 3%.

Crude oil tumbles: Oil prices dropped more than 4%, marking the largest single-day decline in nearly seven months. The move followed comments from Donald Trump suggesting a “wait-and-see” stance on the Iran situation, signaling potential de-escalation, alongside renewed concerns over global supply oversupply. Recent geopolitical risk premiums were fully unwound.

Key Themes to Watch

● Silver rally pauses as Trump refrains from tariffs on critical minerals

According to Citi, silver is likely to avoid tariffs. The absence of tariffs could encourage metal outflows from the U.S., easing tightness in global markets and placing temporary downside pressure on prices. That said, Wall Street remains constructive on silver over the medium term, citing structural supply deficits, robust industrial demand, and spillover demand from gold as ongoing sources of support.

● Bipartisan U.S. lawmakers push USD 2.5 billion critical minerals strategic reserve plan

A newly proposed bill aims to establish a critical minerals exchange with a hybrid framework bridging the Strategic Petroleum Reserve and the Federal Reserve. On the physical side, the plan envisions storage facilities similar to the SPR. From a governance perspective, it would create a Fed-like oversight board responsible for supervising the accumulation and release of critical materials.

Events in Focus （GMT+8)

22:15 US – U.S. December Industrial Production (MoM)

23:00 US – U.S. January NAHB Housing Market Index

Overnight

00:00 US – Federal Reserve Governor Michelle Bowman speaks on the economic outlook and monetary policy

04:30 US – Federal Reserve Vice Chair Philip Jefferson speaks on the economic outlook and monetary policy