Hedging Wave Incoming: Precious Metals Reach New Highs, Crypto Assets Under Pressure

Policy Changes Trigger Market Restructuring

The political signals over the weekend disrupted the market’s steady rhythm. U.S. President Trump announced that the successor to the Federal Reserve Chair has been finalized, hinting that the current Chair Powell may step down early. This news, coupled with China’s new round of cryptocurrency regulations, caused a sharp decline in investors’ risk appetite, with safe-haven funds flowing into traditional safe assets. As a result, Bitcoin (BTC) briefly dropped to around $86,600, and Ethereum (ETH) also suffered, falling over 5%. According to the latest market data, BTC is at $91.95K (down 2.15% in 24 hours), and ETH is at $3.22K (up 0.60% in 24 hours).

Commodity Markets Experience Supply Crisis

Meanwhile, the global commodities market is unfolding an entirely opposite story. Silver prices soared to $57.87 per ounce, hitting a record high, while gold broke through $4,256 per ounce, reaching a new high in over a month. Behind this surge in precious metals is the market’s deep concern over supply exhaustion. Data shows that China’s silver inventories have fallen to a seven-year low, and demand for precious metal derivatives like Canadian coins has also risen, reflecting investors’ urgent need for physical precious metals.

Even more attention-grabbing is the copper market. London copper prices are at $11,292 per ton, also hitting a historic high. Several major mines worldwide have experienced supply disruptions, and with tariff expectations, traders have transported large amounts of metals to the U.S. market seeking higher prices, leading to depletion of copper inventories in other regions. UBS forecasts that copper prices could surge to $13,000 per ton by 2026.

Stock Market and Crypto-Related Stocks Decline Together

The equity market appears dull. Before the opening of U.S. stocks on December 1, all three major index futures declined: Dow Jones futures down 0.49%, S&P 500 futures down 0.63%, Nasdaq 100 futures down 0.78%. Tech giants suffered heavy losses, with NVDA down 1.08% and TSLA down 1.14%. Meanwhile, crypto-related stocks also came under pressure, with Coinbase (COIN) falling over 3%, reflecting market concerns about the outlook for digital assets.

Monetary Policy Shift Sends New Signals

Hawkish remarks from the Bank of Japan added a new variable to the global financial markets. BOJ Governor Ueda Kazuo stated that they will carefully weigh the pros and cons of raising interest rates in December and make an appropriate decision, which is interpreted by the market as the clearest hint yet of a rate hike. The overnight swap index shows traders estimate about a 64% probability that the BOJ will raise rates at the December 19 meeting. As a result, USD/JPY is at 155.31, down 0.52%.

Key Highlights for Next Week

Looking ahead to next week, the U.S. will release the September PCE report on December 5, a key inflation indicator closely watched by the Federal Reserve, which could provide critical guidance for policy decisions. Additionally, developments in U.S.-Russia dialogue are also worth monitoring, as Putin reiterated Russia’s general agreement to use the U.S. proposed Ukraine issue list as the basis for negotiations. Both events are expected to have a profound impact on the performance of risk assets moving forward.