Gold and silver start the last full week of the year with fresh record highs

OUTSIDE MARKET DEVELOPMENTS: Markets begin the last full trading week of the year in risk-on mode. U.S. equity indexes are higher, despite thin pre-holiday conditions, with tech-heavy sectors leading the way.

Investors have rushed back into AI-related stocks following a short-lived pullback earlier in December. This surge underscores persistent enthusiasm for AI infrastructure and breakthroughs in agentic AI as we approach 2026, even amid elevated valuations.

Last week's evidence of cooling inflation boosted bets for further Fed easing in 2026. Fed funds futures suggest the central bank will likely be on pause in Q1'26, with a 25-bps cut not fully priced in until the June FOMC meeting.

Fed Governor Miran told Bloomberg this morning that he believes recent data warrants a more dovish tilt by his peers. He said he has not yet decided if he will advocate for a 50 or 25 bps cut in January.

Geopolitical tensions in the Western Hemisphere have risen to levels not seen since the Cuban Missile Crisis in 1962.  Lethal strikes by the U.S. on alleged drug boats, seizures of oil tankers, and a declared blockade on sanctioned oil exports are seen as violations of Venezuela's sovereignty by President Nicolás Maduro and some of his allies. Polymarket puts the probability of President Trump invoking war powers by January 31, 2026, at 22%.

The threat of armed conflict or war between the U.S. and Venezuela is actively contributing to the debasement trade, as it would likely increase deficit spending. The debasement trade involves investors shifting into hard assets like gold, silver, and sometimes bitcoin to hedge against fiat currency erosion, driven by high government debt, monetary easing, and geopolitical instability that heightens flight-to-safety trades.

Chicago Fed National Activity Index improved to -0.21 in September, versus a revised -0.31 in August (was -0.12). It was the sixth straight negative print.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$70.99 (+01.64%)
5-Day Change: +$128.92 (+2.99%)
YTD Range: $2,607.16 - $4,442.03
52-Week Range: $2,597.53 - $4,442.03
Weighted Alpha: +70.22

Gold was on the bid right from the Asian open, surging to new all-time highs above $4,381.21. The yellow metal was able to extend in London and U.S. trading as well, spurred by surging silver, Fed easing expectations for 2026, a softer dollar, and heightened safe-haven interest.



Waging war is an expensive proposition, so rising tensions between the U.S. and Venezuela are stoking the already well-established debasement trade. The U.S. national debt is expected to crest the $40 trillion threshold in H2'26, sooner if war breaks out. Annual debt servicing costs are already around $1 trillion, and are expected to be above that on a sustained basis moving forward.

Debasing the dollar is the easiest way to run huge deficits without raising taxes or cutting spending. As always, Congress will take the easy way out: Don't pass a budget and trust that the Fed will continue debasing the dollar to keep the plates spinning.

Today's push above $4,400 lends confidence to the $4,515.63 Fibonacci objective. Beyond that, the long-standing $5,000 objective becomes increasingly attractive.

Intraday support at $4,406.39 protects the previous highs at $4,381.21 and today's Asian low at $4,338.42. More substantial support is defined by last week's low at $4,272.52.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$1.961 (+2.92%)
5-Day Change: +$4.673 (+7.29%)
YTD Range: $28.565 - $69.446
52-Week Range: $28.565 - $69.446
Weighted Alpha: +161.10

Silver surged to yet another round of new record highs, bringing $70 within striking distance. The uptrend in the white metal is relentless.



Heightened safe-haven interest and resurgent confidence in the AI sector – despite sky-high valuations – are adding to the upside momentum. Sure, the market is overbought, but small markets like silver can act irrationally for extended periods of time.

The $68.868 Fibonacci objective was satisfied and exceeded. Sights are now on $70, with today's intraday high at $69.446 providing a minor intervening barrier. Beyond $70, the next Fibonacci level comes in at $73.668.

Initial support at $68.146 extends down to $68. Friday's high at $67.452 protects today's Asian low at $67.161. More substantial support is well protected at $64.673/529.

I am not going to write on Christmas Eve, so the next issue of the newsletter will be out on Friday.

Season's greetings from the Zaner Metals team!


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.