Market Report.
📅 It’s possible that we’re starting the last important week of the year in the markets. Weekly Top 3 Risks: U.S. Core PCE Inflation, U.S. Q3 GDP Revision & the Japan’s Tokyo CPI & BoJ Core CP.
🥇 Gold prices have climbed to an all-time high, surpassing the previous record of $4,381 per ounce set in October. Gold is on track for its best annual performance since 1979, having surged about two-thirds this year. This is underpinned by increased central bank purchases and inflows into gold-backed ETFs.
🏦 Two of the main factors that could be behind the rise in gold are: Bets on the Federal Reserve cutting interest rates twice in 2026, as recent economic data has provided little clarity on the outlook. Lower interest rates are a tailwind for non-yielding assets like gold. Heightened geopolitical tensions, including the U.S. oil blockade against Venezuela and Ukraine’s attack on a Russian oil tanker, which have enhanced gold’s safe-haven appeal.
📈 New entrants like stablecoin issuers and corporate treasury departments are also starting to allocate to gold. Silver and platinum prices have also hit record highs, with silver benefiting from speculative inflows and supply dislocations, and platinum rallying due to tightening in the London market.
🤖 New players entering the data center business to support the AI boom: Adriatic DC, a renewable energy company in Italy’s Puglia region, is planning to build a 1.5 gigawatt data center campus – one of the largest AI facilities globally. O’Leary, the Shark Tank TV personality, is pitching a “world’s largest AI data center industrial park” in Alberta, Canada that could support up to 17 gigawatts of capacity. Bitdeer, a former Bitcoin mining firm, is investing hundreds of millions to expand into the AI cloud business, including a 570 megawatt data center campus in Ohio.
⚠️ These new players are aiming to establish themselves as major players in the AI infrastructure buildout, challenging the dominance of Big Tech companies. However, there are concerns that the scale and pace of this data center expansion could lead to an “overbuild” as many inexperienced firms rush into the space, attracted by the hype around AI.
🌍 This also means that failure of the AI bet will have a global impact on more and more economies.
🇨🇳 China left its one-year and five-year LPRs (the benchmark for loan prime rates) unchanged for the seventh consecutive month in December, matching market expectations. The steady LPR fixings suggest the Chinese authorities are not in a rush to deliver fresh monetary easing measures, as the economy appears on track to hit Beijing’s growth target for the year.
🏭 However, China’s economy has been stalling, with factory output and retail sales growth slowing in November due to a lingering property crisis.
🏯 Perpetual money supply is not a magic bullet, and sooner or later, it has to deal with the universal laws of supply and demand. We are referring to the monetary policy of the Bank of Japan during the last decades. Is there real private demand to address the BoJ’s lack of stimulus now that it is finally normalizing its policy?
💶 The authorities could resort to private saving to finance their monetary excesses, as bureaucrats in the EU have also suggested.
💴 Japan’s efforts to tap into household cash to support demand for Japanese government bonds (JGBs): The core idea is for Japan’s finance ministry to target the roughly $7 trillion in household cash and deposits as a fresh source of demand for JGBs, as the Bank of Japan scales back its bond purchases and yields rise above 2%.
📜 This strategy aims to convert part of this idle household cash into longer-term holdings of government paper, broadening the investor base and reducing reliance on banks and foreign investors.
📊 Retail JGB sales have already surged about 30% in 2025 to around 5.3 trillion yen, the highest level since 2007, helped by the higher yields. This comes as the BOJ hikes rates and cuts back JGB buying, increasing the need for stable private-sector demand.
Geopolitics:
🚢 Another oil tanker from Venezuela has been affected by the Trump administration’s intervention. Three vessels have already been impacted: the tanker Skipper on December 10, the boarding of the tanker Centuries on December 20, and the pursuit of the tanker Bella 1 on December 21 – all near Venezuelan waters but in international seas.
🛰️ The three tankers are part of a “shadow fleet” that has been evading US sanctions through tactics like AIS spoofing and false flagging to transport Venezuelan and Iranian oil.
⚖️ US officials say they are acting under sanctions authorities, court seizure warrants, and bilateral agreements. However, Venezuela and its allies have denounced the actions as “piracy” and a violation of free navigation. Caracas has ordered Venezuelan navy escorts for some tankers, raising the risk of potential confrontation at sea.
🛢️ By targeting these vessels, the blockade aims to slash Venezuela’s oil export volumes and hard-currency earnings, cutting off the financial lifelines that sustain Maduro’s patronage system and reducing funds flowing through Iran-linked smuggling networks.
🚫 The US has imposed sanctions on over 100 tankers involved in the Venezuelan oil trade and announced a “complete blockade” of sanctioned oil tankers going to and from Venezuela. These actions are aimed at disrupting Venezuela’s oil exports, which account for about 95% of the country’s overseas revenue, in an effort to weaken the Maduro regime.
📉 The blockade is estimated to directly affect about 500,000 barrels per day of Venezuela’s crude exports, which have already plummeted over 70% from their peak in the late 1990s. This makes the US actions unlikely to have a major impact on global oil prices given Venezuela’s diminished role in the global market and expectations of a looming crude surplus.
🏢 While some foreign oil companies like Chevron still have limited operations in Venezuela, the country’s crude production and exports have been severely impacted by US sanctions and the broader collapse of its oil industry.
🇺🇸 Rep. Lindsey Graham warned that the U.S. could seize ships transporting Russian oil, drawing a direct parallel to the measures Washington has taken against Venezuelan oil shipments.
🇪🇸 Israeli Channel 11 reports that the United States is considering sanctions against Spain over Madrid’s refusal to allow ships carrying military cargo destined for Israel to dock at its ports. U.S. officials reportedly view Spain’s decision as undermining American maritime trade freedom and are weighing punitive measures in response.
🕊️ The Trump administration’s special envoy Steve Witkoff reported that US officials, including Jared Kushner, held “productive and constructive” meetings in Florida with Ukrainian and European counterparts to discuss efforts to end the war in Ukraine. The discussions focused on further developing the existing 20-point peace plan, establishing a US security guarantee framework for Ukraine, and creating an economic development plan for the country.
Market View.
📊 We start the week with US futures moving higher, approaching levels where an upside acceleration could be triggered — particularly if the inverse head‑and‑shoulders formation in S&P 500 futures is confirmed. S&P 500 futures have moved above 6,900 points, while Nasdaq futures have climbed past 25,700 points.
💵 The US Dollar Index (DXY) appears to be regaining momentum, trading above 98.50 after last week’s decline. This has weighed on EUR/USD, which reached 1.18 last week but has since fallen back to around 1.1725.
🇪🇺 European futures remain largely on standby for now, although they ended last week on a strong note. DAX 40 futures are trading near 24,455 points, while Euro Stoxx 50 futures are holding around 5,780 points.
🛢️ The crude oil market is rebounding, possibly driven by renewed attacks on oil tankers involved in trade with Venezuela. Spot Brent has moved back above $61 per barrel.
🌟 An impressive rally continues in gold futures, which have surged above $4,450 per ounce, marking a new all‑time high. Silver is also posting a remarkable move, climbing towards the $70 level.
₿ Finally, Bitcoin is once again attempting to break above $90,000, currently trading around $89,200.
