Silver breaches $79, gold climbs to record high

Today’s headlines

What’s happening: Silver prices rose sharply on Friday, breaching the $79 resistance level for the first time.

What happened: Gold prices surged to record highs amid prospects of rate cuts by the US Federal Reserve and ongoing geopolitical concerns.

Weakness in the US dollar also provided further a boost to precious metal prices.

Why it matters: Silver has recorded sharp gains this year, jumping around 166%, given its high demand for chips and EVs and supply constraints.

Market expect US President Donald Trump to announce a dovish Fed chief to replace Jerome Powell, which reinforced speculations of further monetary policy easing. Investors widely expect the Federal Reserve to announce two interest rate cuts in 2026, with the first cut expected around mid-year.

Gold remains on course to record its best year since 1979, driven by rate cuts, weakness in the US dollar and strong buying by central banks.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, recorded losses last week, providing a boost to gold and silver prices, as a softer greenback makes metals cheaper for foreign buyers.

Last week, Trump said that the US would conduct airstrikes against Islamic State militants in Nigeria. Trump also said that a “lot of progress” had been made during the peace talks with Ukraine’s President Volodymyr Zelenskiy, although an agreement may still take weeks.

Spot price for silver jumped around 10% to $79.1609 an ounce on Friday, while gold surged 1.2% to $4,532.63 an ounce.

What to watch: Investors await the release of the FOMC minutes, scheduled for Tuesday, to get further insights into the Fed’s monetary policy path. The US dollar movement and ongoing geopolitical concerns will also remain in focus.

The markets today

Japanese stocks in focus today as investors monitor the BoJ’s policy outlook

Context: Japan’s Nikkei 225 edged lower this morning, after recording gains in the previous session.

Details: Investors started the final trading week of 2025 on a cautious note, assessing the Bank of Japan’s meeting summary for December. The minutes showed that various members signalled the need for further interest rate hikes.

Weak economic data for November added to the cautious market sentiment. Japan’s industrial production fell at a sharper-than-expected rate, while retail sales showed signs of easing last month. Japan’s jobless rate also remained at its highest level since July 2024.

Losses in the shares of consumer durables, services and electronic technology weighed on the overall market this morning.

Japan’s Nikkei 225 fell 0.39% to trade at 50,550.17 this morning. Meanwhile, the USD/JPY forex pair slipped over 0.1% to 156.39.

What to watch: With no major economic reports due today, investors will continue monitoring the overall geopolitical environment, which is expected to impact Japanese stocks.

Other Markets: US trading indices closed mostly lower on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.04%, 0.03% and 0.05%, respectively.

The news shaping the markets

Russia’s military forces announced an attack on a heating plant in the southern city of Kherson in Ukraine. The news sent the USD/RUB pair lower in forex trading this morning.

Taiwan’s consumer confidence index slipped to 64.3 in December from 64.65 in November, which lent support to the USD/TWD forex pair.

Argentina’s retail sales jumped 15.1% year-over-year to ARS 591,865.6 million in October, which sent the USD/ARS pair lower in forex trading this morning.

Brazil’s total stock of outstanding loans rose 0.9% to R$7.0 trillion in November. On an annualised basis, total credit growth slowed to 9.5% from 10.2%, lending support to the USD/BRL forex pair.

Singapore’s manufacturing production rose 14.3% year-over-year in November, easing from a revised 28.9% growth in the previous month, which sent the USD/SGD pair higher in forex trading this morning.

What else to watch today

India’s industrial production (1430 UAE Time) and manufacturing production (1430 UAE Time), Brazil’s IGP-M inflation (1500 UAE Time), France’s unemployment benefit claims (1500 UAE Time) and jobseekers total (1500 UAE Time), US pending home sales (1900 UAE Time), Dallas Fed manufacturing index (1930 UAE Time), EIA crude oil stocks change (1930 UAE Time), and EIA gasoline stocks change (1930 UAE Time) as well as Russia’s inflation rate (2000 UAE Time).