Gold and Silver prices continued climbing with Gold up 0.75% in the past 5 days at $5969 CAD. Silver is up 6.25% from last week to $90.74 CAD and crossed above $65 USD for the first time. Silver is currently up 111% YTD in USD terms. US Dollar index DXY is flat this week at 98.44. SP500 Volatility Index VIX rose 12.5%. SP 500 ES futures are now trading 6827 flat this past week and still shy of the key 7000 level. Markets were moved primarily by Thursday’s lower than expected CPI number. Inflation in November fell to 2.7%, with the Bureau of Labor Statistics reporting for the first time since the government shutdown. The data includes assumptions used to fill in missing information and as a result they assumed 0% inflation for shelter in October. Critics point to a possible underreporting of costs.
Crude WTI futures have drifted -3% to $55.83, despite escalating US/Venezuela tensions. The US seized a tanker last week and established a Naval Blockade to prevent Venezuelan oil from being exported. In response Nicholas Maduro ordered his navy to escort Venezuelan ships, risking attack from the United States. Venezuela has the largest oil reserves in the world as well as significant rare earth metals and gold.
Barchart reported earlier this week that Oracle Credit Default Swaps have surpassed 140 bps and are trading at the highest level since 2009. Oracle fell 15% last Thursday morning on news of higher than expected expenses. Oracle’s suffering has extended, now down another 8.25% this week at 180.03
Ai powered Government Contractor Palantir is flat - PLTR currently trades at $185.69, up 135% this YTD. NVDA is down 4% in the past 5 days and down 5% this past month at $174.14.
Crypto’s rebound has faltered with BTC down 3.5% this week to $87,300 and a recent low of $80,500 USD. ETH is down 12.5% to $2928 this past week and down 5.5% this past month.
On Tuesday the President declared that Fentanyl, a powerful prescription synthetic Opioid Painkiller, will be classified as a Weapon of Mass Destruction. It is unclear which country will be targeted by this new inflammatory rhetoric. Illicit fentanyl in the USA comes primarily from Mexican Cartel Labs that source the precursors from China.
S&P AeroSpace and Defense ETF XAR rose 3.5% in the past 5 days to $233.14
Weekly Jobless Claims fell 13,000 to 224,000 for the period ending Dec 13th. The Gold/Silver ratio is down 5.25% at 65.66, its lowest level since May 2021 though still over twice the 31.71 low of March 2011. Longer 20 yr and 30 yr US government bonds are up flat 4.77 and 4.82% respectively.
With a total of three rate cuts now in 2025; the polymarket quoted probability of a total 100 bps in cuts coming next year is currently 16%, 75 bps in cuts in 2026 stands at 20% and the probability of 50 bps is 20%. Short term rates are down 6 bps in the 2yr at 3.47. US Comex Copper Futures HG, a leading indicator of economic growth, rose 2.5% to $5.49 usd/lb.