December 23 Financial Weekly: Precious metals soar, tech stocks drive continuous gains in the US stock market, Alphabet invests $4.75 billion to expand AI and energy infrastructure

Precious Metals Market Explodes: Three Factors Converge to Drive Prices Higher

Geopolitical risks intensify, expectations of Fed rate cuts ferment, and the US dollar remains under pressure, leading to a comprehensive heating of the precious metals market. Gold prices stand at $4443.9/oz, up 2.43% from the previous trading day, breaking the $4400 threshold, with a intra-day high of $4449. Silver performs even better, rising 2.82% to $69.44, just one step away from the key $70 level.

London copper futures continue their strength, reaching $11,996.18 per ton at one point, a 1.01% increase. Industrial demand for precious metals remains robust. Spot palladium surprises with a three-year high, reaching a peak of $1800.85/oz, a 4.86% increase. Spot platinum also breaks previous highs, reaching $2096.81/oz at one point, up 6.07%. This collective heating of precious metals reflects market multi-dimensional pricing of economic outlook.

Energy Sector Under Pressure: U.S.-Russia Talks Fail to Make Breakthrough, Weighing on Crude Oil

Peace negotiations between Ukraine and the US in Miami failed to achieve substantive breakthroughs. Ukrainian President Zelensky confirmed that the delegation has concluded negotiations and returned to Kyiv. Although both sides completed key work on the “peace plan” draft, core disagreements remain unresolved, adding uncertainty to the oil market.

Against this backdrop, WTI crude oil rose 2.49% to $57.95 per barrel, gaining over 2%. Meanwhile, the US government intensified its crackdown on Venezuelan oil tankers, attempting to seize the third tanker entering or leaving Venezuela, further tightening the global oil supply chain.

US Stocks Rise for Three Consecutive Days, Tech Sector Leads the Charge

The US stock market continued its upward momentum, marking a third consecutive day of gains. Dow Jones rose 0.47%, S&P 500 increased 0.64%, and Nasdaq climbed 0.52%. The China Golden Dragon Index also rose 0.58%. European markets performed relatively sluggishly, with Germany DAX 30 down only 0.02%, France CAC 40 down 0.37%, and UK FTSE 100 down 0.32%.

Tech stocks are the main drivers of this rally. Nvidia closed up 1.5%, Tesla up 1.6%, Oracle rebounded strongly with a 3.3% increase, and Micron Technology rose 4%. Market anticipation for the “Christmas rally” at year-end continues to heat up, with the VIX fear index dropping 5.5%, hitting a more than one-year low.

Alphabet Invests $4.75 Billion to Acquire Energy Company Intersect to Support AI Expansion

Amid the surge in generative AI-driven electricity demand, tech giants are ramping up their energy sector investments. Alphabet announced on Monday that it has reached a final agreement to acquire US clean energy developer Intersect Power for $4.75 billion in cash, assuming related debt.

Intersect is supported by private equity firm TPG and currently owns $15 billion worth of operational or under-construction assets. By 2028, the group’s total capacity is expected to be approximately 10.8 GW, more than 20 times the power output of Hoover Dam, earning it the nickname “Disney of Energy” in Texas. Alphabet CEO Sundar Pichai stated that this move will help the company expand capacity and reimagine energy solutions. As the US grid struggles to meet soaring AI electricity demands, this acquisition marks an intensification of energy layout competition in the tech industry.

Chip Shipment Schedule Announced: Nvidia H200 to Supply China in February, Pending Approval

According to sources cited by Reuters, Nvidia has informed Chinese clients that it plans to start shipping H200 AI chips to China before the Lunar New Year holiday in mid-February. The expected shipment volume is between 5,000 and 10,000 chip modules, equivalent to approximately 40,000 to 80,000 H200 AI chips. The company also plans to increase new chip capacity, with new production capacity accepting orders starting in Q2 2026.

However, Beijing has not yet approved any H200 procurement, and the schedule may be adjusted based on government decisions. Former President Trump stated this month that Washington would allow such sales but with a 25% fee. This shipment will mark the first delivery of H200 chips to China, though uncertainties remain.

Federal Reserve Officials Signal Hawkish Stance; Bank of Japan Rate Hike Weakens Yen

Federal Reserve Board member Lael Brainard indicated that if the Fed does not continue rate cuts next year, it could risk triggering an economic recession. She emphasized that rising unemployment should push Fed officials toward a dovish stance. Brainard’s term ends in January next year, and since joining in September, she has advocated for more aggressive rate cuts.

The Bank of Japan announced a rate hike last week, but the yen weakened instead. Japanese Finance Minister Shunichi Suzuki issued the harshest warning to date to speculators, stating that for exchange rate fluctuations inconsistent with fundamentals, “bold actions” can be taken. This rhetoric hints at possible intervention, with US approval implied.

Market Data Snapshot

Forex: US Dollar Index down 0.48% to 98.24; USD/JPY down 0.44%; EUR/USD up 0.45%.

Bond Market: US 10-year benchmark Treasury yield around 4.16%, up 2 basis points from the previous day.

Crypto Assets: Bitcoin down 0.06% in 24 hours to $88,587; Ethereum up 0.25% in 24 hours to $3,008.

Hong Kong Stocks: Hang Seng Index night futures close at 25,909 points, up 95 points, over the previous close of 25,801 by 107 points.

Macro Watch: Declining US Dollar Reserves, Euro Rises Quietly

IMF data shows that in Q3 this year, the US dollar’s share of global reserves declined to 56.92%. After significant fluctuations in Q2, the three-month period until the end of September stabilized overall. The euro’s share increased from 20.24% to 20.33%. Yen-denominated reserves also rose from 5.65% in Q2 to 5.82% in Q3. This reflects a long-term trend of global reserve diversification.

Policy Risks: US Government Halts Multiple Offshore Wind Projects

The US government announced the suspension of offshore wind projects off Virginia and four other projects along the East Coast. The news caused Dominion Energy, responsible for developing these projects, to fall over 5%. The government also paused leasing for Vineyard Wind 1 in Massachusetts, Revolution Wind in Rhode Island, Sunrise Wind along Long Island and New England, and Empire Wind 1 in southern Long Island. This move represents a significant blow to the renewable energy industry.

Key Events Today

The Reserve Bank of Australia will release the latest monetary policy meeting minutes; Canada will publish October GDP monthly rate data; the US will release preliminary Q3 real GDP annualized quarterly rate, preliminary personal consumption expenditures quarterly rate, core PCE price index, and other key economic indicators; also, October durable goods orders, November industrial production, December consumer confidence index, and weekly API crude oil inventory data will be released.