Amillex Daily Market Commentary | Year-End Profit-Taking Dominates as Equities, Gold, and Crude Undergo Broad Retraction.

January 02, 2025. On the final full trading session of the year, global markets were clearly characterized by profit-taking and contracting liquidity, exerting broad pressure on risk assets. The three major US indices retreated in tandem as investors opted to lock in gains ahead of the annual settlement. The US Dollar remained resilient post-holiday, while in the metals complex, gold and silver pulled back from recent highs as the safe-haven premium cooled. Energy markets followed suit, with crude oil sliding amid cautious demand outlooks and position squaring. Overall, the price action on December 31 reflected a technical retracement driven by year-end flows rather than a fundamental shift, setting the stage for new tactical maneuvering in early 2026.

Market Performance and Fundamental Analysis by Asset Class

1. US Stock Market

Index Performance:

The Dow Jones Industrial Average dropped 0.63% as financials and cyclicals faced headwinds;

The S&P 500 surrendered earlier gains to close 0.74% lower, exhibiting classic year-end rebalancing;

The Nasdaq Composite was the primary laggard, down 0.76% as heavy-weight tech stocks dragged on the index.

Key drivers: Institutional year-end book squaring and position rebalancing, significant profit-taking in tech following impressive annual gains, and thin trading volumes which exacerbated price volatility.

2. Forex Market:

The US Dollar Index (DXY) strengthened post-holiday to fluctuate near 98.3, acting as a headwind for commodities and risk assets;

EUR/USD fluctuated within the 1.170—1.175 range, pressured by dollar strength and year-end consolidation;

USD/JPY maintained its high-level consolidation between 156 and 157; the pair remains dollar-driven, with further yen depreciation risk if greenback strength persists.

3. Precious Metals and Commodities

Precious Metals:

Spot gold (XAUUSD) edged lower on the final day but closed the year with a remarkable 64% gain.

Spot silver (XAGUSD) experienced sharper volatility and a significant daily decline, though its annual performance remained stellar at over 147%. Should industrial demand remain steady into early 2026, silver retains its rebound elasticity.

Commodities:

WTI Crude Oil settled near $57.5/barrel, down 1%, reflecting year-end liquidation and cautious demand forecasts for 2026. Ample global supply and a lackluster demand recovery pace, coupled with year-end positioning, pressured prices, though any supply shocks in early 2026 could spark a reversal.

4. Today’s Focus