Gold and Silver prices fell back with Gold down 4.5% in the past 5 days at $5929CAD. Silver is down 12% from last week to $98.24CAD. Silver is currently up 143% Year over Year in USD terms. US Dollar index DXY is up 0.5% this week at 98.41. SP500 Volatility Index VIX rose 5%. The highly anticipated “Santa Clause Rally” from Dec 26th - 31st failed to materialise this year. SP 500 ES futures are now trading 6879 down 1.5% this past week and failed to successfully break above the 7000 level in 2025. Nevertheless, the SP500 performed very well last year, up 14% year over year YOY and up 83.5% in the past 5 years.
Crude WTI futures have fallen 2.25% to $57.01 and down 19% YOY. OPEC members had begun to unwind production cuts early as non OPEC members like the US and Canada have increased production. Chinese and European demand cooled in 2025 due to weaker macroeconomic conditions and increasing use of EVs. China's GDP slowdown estimates range from under 3% to 3.2%, a steep drop from official 5% targets. European GDP suffered as well with growth in the 1-1.4% range for the Eurozone. Geopolitical factors like the conflicts with Iran, Venezuela and the ongoing Ukraine war were not enough to sustain price increases, instead contributing to volatility in a downtrending oil market.
Ai powered Government Contractor Palantir is down 14% - PLTR currently trades at $167.52, still up 117% YOY. Valuation and Ai overheating concerns have had an impact on Palantir going back this fall and the famous closure of Scion Capital Management and “Big Short” trader Michael Burry publishing a large options bet against both Palantir and Nvidia. Palantir's current price is 422 times its earnings per year. NVDA is up 0.25% in the past 5 days and up 4% this past month at $189.35.
Crypto has stabilized with BTC up 3% this week to $90,000 after a November low of $80,500 USD. ETH is up 5.5% to $3110 this past week and up 10% this past month though still down 7% YOY. The crypto crash started on Oct. 10 when Trump threatened to impose an extra 100% tariff on Chinese imports — on top of the 30% already in place.
S&P AeroSpace and Defense ETF XAR fell 1% in the past 5 days to $246.80. XAR is up 48% in the past 12 months. In 2025, global conflict was volatile with ongoing major conflicts in Ukraine and Gaza, alongside escalating regional crises in Sudan, the Eastern DRC. Notably, hypersonic and nuclear flashpoints between Israel and Iran as well as sustained heavily destructive war with the IDF in Southern Lebanon and USA/Israeli support of Al Qaeda in Syria have continued to push Middle Eastern Tensions. On 23 June 2025, Iran launched missiles at Al Udeid Air Base in Qatar, in retaliation for the United States strikes on Iranian nuclear facilities. On June 24th Trump announced the end of the Iran-Israel 12 Day War.
Asian conflicts between India and Pakistan faced two nuclear powers against each other over a terrorist attack in Kashmir. In Venezuela, the USA implemented a Naval Blockade to stop oil tankers from leaving the country. Venezuela has the world's largest known oil reserves. In late December 2025, President Trump confirmed that the U.S. "hit" a major facility in Venezuela allegedly used for loading drugs onto boats. Reports indicate the CIA conducted a drone strike on a port facility, marking the first known U.S. land-based operation inside the country during this campaign.
Weekly Jobless Claims fell 16,000 to 199,000 for the period ending Dec 27th. The Gold/Silver ratio rebounded up 6.5% at 59.94 after falling steadily since late October and down 45% from its March high of 107. Longer 20 yr and 30 yr US government bonds are up 5bps to 4.82 and 4.87% respectively.
With a total of three rate cuts now in 2025; the Polymarket quoted probability of a total 100 bps in cuts coming in 2026 is currently 18%, 75 bps in cuts in 2026 stands at 18% and the probability of 50 bps is 23%. Short term rates are flat in the 2yr at 3.48.
Looming in the background of last year was the risk of the unwinding of the Japanese Carry Trade. A strengthening Yen vs the USD and/or rising borrowing costs for the Yen vs USD could result in the unwinding of an estimated $1 trillion dollar (Bank of international Settlement) Financing of international capital markets. This does not include an estimated $14 trillion in notional value derivatives. On Dec 19th Barchart reported: Japan's 30-Year Bond Yield jumped to 3.435%, the highest level in history. Japanese rate hike odds for January are about 2% and for March it stands at about 9%.
US Comex Copper Futures HG, a leading indicator of economic growth, rose 0.25% to $5.70 usd/lb. Two weeks ago London Metals Exchange LME Copper hit a new all time high above $12,000 per tonne. Chinese demand has softened though traders are said to be front running tariff risk and Datacenter demand, keeping US bound shipments buoyed.
Happy New Year!!!