Amillex Daily Market Commentary：Rate-Cut Expectations and Geopolitical Risks Drive Gold & Silver to New Highs, Oil Under Pressure Amid Russia-Ukraine Talks

December 29, 2025. During early Asian trading on Monday, precious metals extended their strong rally. Spot gold hovered around USD 4,537 per ounce, while silver surged to a record high of USD 83.21 per ounce. The rally has been driven by rising expectations of further U.S. Federal Reserve rate cuts in 2026, a softer U.S. dollar, and escalating geopolitical risks. Meanwhile, WTI crude oil traded near USD 57.10 per barrel, as markets focused on developments in Russia-Ukraine peace negotiations. While U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky failed to reach consensus on territorial issues, talks on security guarantees are reportedly close to completion.

Equity markets were largely flat on Friday amid thin holiday trading. All three major U.S. indices posted marginal losses but remained near record highs, with weekly performance still positive. Investors continue to watch the so-called “Santa Claus rally,” which, if realized, is often seen as a constructive signal for the year ahead. Despite headwinds from tariffs, geopolitical tensions, and volatility in AI-related stocks, major indices are still on track to post double-digit gains for 2025, led by technology shares. Sector-wise, materials and consumer discretionary outperformed, while real estate lagged. On the stock front, NVIDIA, Target, and U.S.-listed precious-metal miners all recorded solid gains.

In the metals market, the global precious-metals bull cycle remains intact. Silver is up more than 170% year-to-date, while gold and platinum have also reached record highs. Analysts suggest silver could challenge USD 100 per ounce by year-end, with gold targeting USD 4,800–5,000 in the medium term. However, physical demand shows signs of divergence, with Indian gold consumption pressured by elevated prices.

Oil prices fell more than 2% last week, as concerns over global supply oversupply continue to dominate sentiment. The IEA forecasts global oil supply in 2026 will significantly exceed demand. Any progress toward a Russia-Ukraine peace deal — potentially easing sanctions on Russian oil — could further reshape global supply dynamics.

In FX markets, the Japanese yen weakened during holiday trading, while the U.S. dollar edged slightly higher. Despite recent rate hikes by the Bank of Japan, expansionary fiscal policy continues to weigh on the yen, prompting repeated intervention warnings from Japanese officials. Markets broadly expect the Fed to deliver 2–3 rate cuts in 2026, keeping medium-term pressure on the dollar.

On the geopolitical front, Trump and Zelensky signaled substantial progress on security arrangements in Russia-Ukraine talks, though territorial issues remain unresolved. Meanwhile, tensions between the U.S. and Israel over Gaza ceasefire negotiations persist. Additional developments — including planned Russia-U.S. parliamentary talks, a recovery in South Korea’s shipbuilding market share, rising food prices in Japan, and Zimbabwe’s push toward a single-currency system under ZiG — also remain in focus.

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