Safe-Haven Flows Propel Gold to Fresh Record Highs as the S&P 500 Erases YTD Gains

Market Overview

Global risk aversion surged sharply yesterday, driven by a selloff in long-dated Japanese government bonds that triggered what markets dubbed a “Truss moment,” alongside escalating tensions surrounding Greenland. These developments fueled a pronounced “sell America” trade across global markets.

U.S. equities suffered broad-based losses, with all major indices closing sharply lower. The S&P 500 has now fully erased its year-to-date gains. Small-cap stocks declined 1.2% on the day, yet continued to outperform the S&P 500 for a 12th consecutive session. Market anxiety intensified as the VIX volatility index spiked to its highest level since November last year.

In individual stocks, major technology names came under heavy pressure. Oracle fell nearly 6%, Nvidia dropped more than 4.3%, and Tesla declined over 4%. Netflix also slid close to 5% in after-hours trading following its earnings release.

Bond and currency markets experienced heightened volatility. Japanese government bond yields surged across the curve, with the 40-year yield jumping 27 basis points, officially entering the “4% era.” U.S. Treasuries were also sold aggressively, pushing the 10-year yield up to 4.293%. The U.S. dollar weakened, briefly slipping below the 98 level on the dollar index. The Chinese yuan remained relatively resilient, strengthening past 6.95 intraday before retracing in a V-shaped move to finish roughly flat.

Commodities and Crypto Performance

Safe-Haven Assets and Energy

Risk-off flows poured aggressively into gold, which rose nearly 2% intraday to USD 4,762 per ounce, marking a fresh all-time high. U.S. natural gas futures surged 23% after forecasts pointed to an intensifying cold snap, posting the largest single-day gain since 2022. Crude oil prices staged an inverted V-shaped reversal, with Brent crude ultimately closing lower.

Cryptocurrencies

Digital assets saw sharp selloffs. Bitcoin fell below USD 90,000 intraday, registering its largest single-day decline since October 10 last year. Ethereum dropped nearly 7%, breaking below the key USD 3,000 level.

Key Themes to Watch● Hiring Momentum Softens Slightly: U.S. ADP Shows Weekly Job Gains of 8,000

The latest weekly ADP data indicate that over the four-week period ending December 27, 2025, U.S. private-sector employment increased by an average of 8,000 jobs per week, down from 11,750 in the prior week. This suggests a modest deceleration in hiring activity toward year-end.

Previously, private payrolls rose by 41,000 in December, reversing Novembers contraction but still coming in slightly below market expectations. Overall, despite short-term fluctuations, the labor market continues to show underlying resilience, with weekly trends pointing to a gradual and orderly adjustment rather than a sharp slowdown.

● EU Responds for the First Time to Trumps Tariff Threats

While the European Parliaments delay in ratifying agreements does not directly invalidate existing deals, it sends a clear signal of dissatisfaction to Washington. U.S. Trade Representative Greer stated that current U.S.-EU trade arrangements fail to address several American concerns, arguing that Trumps tariff threats represent an appropriate use of trade policy tools.

Greer also suggested that these moves may be linked to upcoming negotiations involving Greenland. Denmarks prime minister reaffirmed that sovereignty is non-negotiable and stated that the country is prepared for the possibility of a trade conflict.

Key Data to Watch (GMT+8)

21:30 US

• U.S. November Building Permits (annualized, millions)

23:00 US

• U.S. December Pending Home Sales MoM

• U.S. October Construction Spending MoM

• U.S. December Conference Board Leading Index MoM