① Following the plunge in overvalued AI stocks in the US market last Friday, safe-haven and speculative funds flowed into precious metals on Monday. In the market, spot gold rose for the fifth consecutive day and climbed above $4,340, while silver, platinum, and palladium all surged. Secondly, expectations of a Fed rate cut have also fluctuated, coupled with Trump's strong support for "lower interest rates," significantly increasing the attractiveness of non-interest-bearing assets.
On Monday afternoon Beijing time, Asian stock markets generally fell as a new wave of safe-haven and speculative funds flowed into the precious metals market, while spot gold rose for the fifth consecutive day, and silver, palladium, and platinum strengthened to varying degrees.
As of press time, spot gold rose nearly 1% on the day, reaching $4,340 per ounce ; spot silver, which retreated after hitting a record high last Friday, also rose more than 2% on the day; spot platinum and palladium also rose more than 2% . In the domestic commodity futures market, the main platinum contract hit its daily limit on Monday, and palladium also rose more than 4%.
Monday's unusual movement in precious metals was catalyzed by two obvious factors: the plunge in overvalued AI stocks in the US on Friday spread to Asian markets, and new developments emerged in expectations of a Federal Reserve rate cut.
As background, last Friday, the Philadelphia Semiconductor... The SOX index plunged more than 5% , as investors reacted to concerns about artificial intelligence. Funds were withdrawn from tech stocks amid concerns about a bubble and shifted to other sectors.
As a result, by Monday's close, the South Korean KOSPI index fell by more than 1.8%, with Samsung Electronics and SK Hynix both falling by nearly 3%; the Nikkei 225 index fell by more than 1.3%, with SoftBank Group, deeply involved in the "AI narrative," falling by 5.95% , and Nvidia... Advantest, a supplier and chip testing equipment manufacturer, fell more than 6% ; conversely, the TOPIX index, which was less affected by the AI theme, closed up 0.22%.
Chinese stocks were also affected. This included A-share CPO stocks, Hong Kong-listed semiconductor and Chinese tech stocks, and TSMC in the Taiwanese market. AI-related stocks, such as Foxconn Technology, weakened.
At the same time, the continued rise in expectations of a Federal Reserve rate cut is also beneficial to "non-interest-bearing assets" such as precious metals.
Last week, the Federal Reserve cut interest rates for the third consecutive time amid divided opposition and began purchasing short-term Treasury bills. US President Trump publicly stated on Friday that former Federal Reserve Governor Kevin Warsh is now the top nominee for the next Federal Reserve Chairman .
Market rumors circulated that during a 45-minute interview last Wednesday, Trump asked Warsh if he could trust him to support interest rate cuts if he were elected Federal Reserve Chairman . The US President confirmed this, stating that "he believes interest rates must be cut." When asked what level he hoped interest rates would be at in a year, Trump stated bluntly:
"1%, or lower ."
Following the latest surge, gold prices have risen by over 60% this year, while silver has more than doubled, with both precious metals poised for their best annual performance since 1979. Analysts also anticipate that this rally could continue into 2026, driven by continued buying from central banks and institutions, as well as investors shifting from government bonds and money markets to precious metal products .
In its latest report, ANZ Bank Analysts Soni Kumari and Daniel Hynes predict that gold prices will exhibit a "two-stage" trend in 2026, reaching a high of nearly $4,800 by the end of the second quarter in the first half of the year, before falling back.
The two researchers also stated that the supply deficit, resilient industrial demand, and uncertainty surrounding US import policies will continue to support silver prices. They also anticipate that the US will not impose import tariffs on silver; if this policy is confirmed, it could trigger an outflow of silver from US inventories and ease supply tensions.
Kumari and Hynes also mentioned that India allowed pensions last week. The move by funds to invest in gold and silver ETFs could also increase institutional participation . It is understood that India's private pension fund sector manages assets of 15.78 trillion rupees (approximately 1.22 trillion yuan).
As the last full trading week of the year for overseas markets, two important data releases are likely to impact the precious metals market. The U.S. Department of Labor will release November employment data and part of October's employment data on Tuesday, followed by the November CPI on Thursday.
(Article source: CLS)
