Precious metals are caught in a tug-of-war between bulls and bears, with safe-haven demand facing a "cooling" test — geopolitical easing and upcoming data releases arrive simultaneously

Beware of Turning Signals: Peace Dawn Melts Gold Rally

The once unstoppable international gold prices reversed course on the 15th, with the early morning surge of 1% suddenly dissipating. The February gold futures on the New York Mercantile Exchange closed modestly up by only $6.9 (0.2%), ending at $4,335.2 per ounce, while spot gold quoted around $4,305.

Behind this “fizzle” in the market, the primary driver is the changing rhythm of geopolitical tensions. Negotiations between the US and Ukrainian authorities regarding a ceasefire in the Russia-Ukraine war have reported “progress.” US Special Envoy Wittekov claimed that both sides had made “many advances,” and Ukrainian negotiator Umerov stated that the talks over the past two days were “constructive.” Such positive news directly eased market concerns over escalating conflict, thereby reducing gold’s appeal as the ultimate safe haven.

Senior analysts pointed out that signs of thawing in Russia-Ukraine negotiations have begun to significantly suppress safe-haven buying, which is the deep logic behind the rapid convergence of gold’s rally.

Pre-Data “Brake” — Investors Hold Steady

Apart from geopolitical factors, uncertainty in macroeconomic data is also creating a wait-and-see atmosphere in the market. Several major data releases have been delayed due to the US government shutdown this week, becoming a litmus test for traders to reposition.

On the 16th (Tuesday), the November non-farm payroll report and October retail sales data will be released simultaneously. Market expectations are for only 50,000 new non-farm jobs, far below September’s increase of 119,000. On the 18th (Thursday), the November Consumer Price Index (CPI) will follow. These data points are directly related to the Federal Reserve’s policy outlook. Until key indicators settle, participants are reducing directional bets, resulting in the current “divided opinions” situation.

Divergence in Precious Metals: Gold “Cold,” Other Metals “Hot”

Interestingly, while gold faces waning safe-haven demand, silver, platinum, and palladium are defying the trend and strengthening, reflecting market funds seeking value beyond gold.

Data shows that on December 15, the precious metals market exhibited clear divergence: silver futures rose 2.6% to $63.589 per ounce, platinum futures climbed 3.0% to $1,815.9 per ounce, and palladium futures surged 5.2% to $1,623.1 per ounce. This “gold lagging, other metals leading” pattern precisely indicates that once the pure safe-haven attribute diminishes, industrial-use precious metals are supported by their diverse demand bases.

Uneven Performance of Base Metals — USD Weakness Boosts Copper

The base metals sector also shows internal divergence. The weakening dollar has been a “savior” for copper prices. On the 15th, amid a 0.15% decline in the ICE US Dollar Index to 98.25, three-month copper on the London Metal Exchange rose 1.16% to $11,686 per ton, and NY copper also increased 1% to $5.4120 per pound.

However, this warmth did not extend across the entire base metals market. Aluminum futures remained flat, while lead and zinc futures declined, with nickel dropping the most at 2.22%. This indicates that although dollar depreciation provides some support, certain base metals still face demand-side pressures.

Federal Reserve Leadership Uncertainty and Policy Outlook

On the broader front, rumors surrounding the Fed chair appointment add further uncertainty. The possibility of White House economic advisor Haskett taking over has been questioned by pro-Trump figures, casting a shadow over long-term expectations.

According to CME FedWatch data as of the 15th, the market assigns only a 24.4% probability to a rate cut of 25 basis points (to 3.25%-3.50%) by January 28, 2026, with a 75.6% chance of holding rates steady. This reflects that while markets expect some easing in the long term, expectations for a near-term policy shift remain limited.

Market Direction Pending, Data and Negotiations Will Decide

Looking back to last Friday, copper prices hit a historic high of $11,952 per ton amid supply concerns but faced a sell-off on Monday due to AI worries; silver, meanwhile, followed gold’s lead but showed stronger resilience. These unpredictable signals point to a single conclusion: the precious and base metals markets are currently at a critical balancing point.

As key US economic data are finalized and developments in Russia-Ukraine peace negotiations unfold, this tug-of-war between bulls and bears is likely to be broken, paving the way for a new clear market direction.