Dollar Slides as Commodities Jump (12.24.2025)

Global commodity markets rose on geopolitical tensions, with Brent crude holding near $62 per barrel as US intervention in Venezuelan oil and Black Sea infrastructure attacks offset rising US inventories. 

Precious metals hit historic peaks, with gold surpassing $4,500 and silver reaching $70 due to Federal Reserve easing expectations and safe-haven demand, bringing their annual gains to 70 percent and 140 percent respectively. In currency markets, the US dollar weakened on rate cut speculation, allowing the euro to trade above $1.17, the pound to clear $1.35, and the offshore yuan to reach a one-year high. Meanwhile, the yen strengthened amid Bank of Japan normalization debates and potential intervention risks.

Euro Strengths Amid Policy Divergence

EUR/USD rose for a third consecutive session to 1.1790 during Wednesday's Asian trade, hovering near late-September highs. Euro support stems from the ECB holding rates for a fourth meeting and raising its 2025 growth forecast to 1.4%, noting resilience against US tariffs. With Eurozone inflation projected near 2% through 2028, the currency remains firm. However, soft US inflation data fueled expectations for Federal Reserve rate cuts next year, further driving the pair’s upward momentum.

Technically, 1.1700 is the key support, while resistance is seen at 1.1810.

Yen Gains on Intervention Cautions

The Japanese yen climbed toward 155.7 against the dollar, marking its third consecutive session of gains as investors braced for potential government intervention. Remarks from Finance Minister Katayama highlighted authorities' preparedness to counter extreme volatility. Recent BOJ minutes indicated internal discussions regarding moving rates toward neutral levels, even as Governor Ueda offered softer commentary following last week’s hike. Investors are now focused on the upcoming FY2026 budget proposal, which is projected to reach approximately ¥122 trillion.

Technically, resistance stands near 156.50, while support is firm at 154.60.

Gold Surpasses $4,500 Milestone

Gold surged past $4,500 to a new record on Wednesday, driven by geopolitical uncertainty and anticipated Federal Reserve rate cuts. While US Q3 GDP showed strong expansion, cooling labor data supports market pricing for two rate reductions in 2026. Safe-haven demand intensified following a US blockade of Venezuelan oil tankers. Up roughly 70% in 2025, gold is heading for its best annual performance since 1979, supported by strong central-bank buying and high inflows into gold-backed ETFs.

Gold sees support near $4350, while resistance is around $4500.

Pound Trades Higher Near 1.3510

GBP/USD is trending upward around 1.3510 during Wednesday's early European session. Sterling finds support in the belief that the Bank of England will adopt a gradual easing path following last week's reduction to 3.75%. Nevertheless, strong US economic figures highlighted by Q3 GDP expanding at 4.3% against the 3.3% forecast provide the Greenback with strength, which may restrict the currency pair's continued upward movement.

From a technical view, support stands near 1.3430, with resistance around 1.3540.

Silver Hits Fresh High on Rate-Cut Bets

Silver climbed past $72 per ounce on Wednesday, marking its fourth consecutive day of gains to reach a new peak. The rally stems from anticipated US rate cuts, safe-haven interest, and geopolitical instability. While Q3 GDP was strong, weakening data points support easing expectations. Up 149% this year, silver is benefiting from supply shortages, intense industrial needs, and its recent US critical mineral designation.

From a technical view, resistance stands near $75.00 while support is located around $72.00.