Year-End Profit-Taking Weighs on Precious Metals as USD and Risk Assets Diverge
Date: January 2, 2026
Market Highlights
As 2025 came to a close, global financial markets experienced significant volatility. The U.S. Dollar Index reached a one-week high of 98.50 before settling slightly higher at 98.28, despite recording its largest annual decline in eight years. Initial jobless claims unexpectedly dropped to 199,000, which led to an increase in U.S. Treasury yields, with the 10-year yield rising to 4.172% and the 2-year yield climbing to 3.483%. This reflects ongoing market divergence regarding the Federal Reserve's policy direction.
Precious Metals and Commodities
Precious metals faced substantial profit-taking after a year of historic gains. The CME's second margin hike for precious metals futures within a week contributed to a sharp decline in gold and silver prices. Spot gold fell to a low near USD 4,274 before settling below USD 4,310, while silver experienced an intraday drop exceeding 7%. Crude oil prices also faced downward pressure due to oversupply concerns, with both WTI and Brent crude closing lower.
Equity Markets
U.S. equity indices softened as the year ended, although they still achieved double-digit gains for the third consecutive year. In contrast, Hong Kong and A-share markets concluded the year with notable performances despite facing short-term pressures.
Key Outlook
Looking ahead, market participants will focus on final manufacturing PMI readings from Europe and the U.S., including the S&P Global U.S. Manufacturing PMI. Continued contraction in these readings could heighten concerns over slowing global momentum, negatively impacting risk assets while providing temporary support to the dollar. Conversely, signs of stabilization may alleviate pessimism and allow for a short-term recovery in equities and non-dollar assets. Following the recent sharp corrections in precious metals, near-term volatility is expected to be influenced by macroeconomic data and policy expectations.
Key Data and Events
- New Zealand – New Year’s Day
- China – New Year’s Day
- Japan – Market Holiday
- 16:55 EU GERMANY Manufacturing PMI Final DEC
- 17:00 EU Manufacturing PMI Final DEC
- 17:30 GB Manufacturing PMI Final DEC
- 22:45 US ISM Manufacturing PMI Final DEC
Market Analysis
EURUSD
Resistance: 1.1786 / 1.1808 | Support: 1.1689 / 1.1666
The EURUSD remains range-bound amid thin liquidity, with markets awaiting final manufacturing PMI data expected to weaken.
GBPUSD
Resistance: 1.3534 / 1.3575 | Support: 1.3399 / 1.3357
The GBPUSD is consolidating alongside USD movements, with limited directional guidance expected from the UK December Manufacturing PMI.
USDJPY
Resistance: 157.77 / 158.17 | Support: 156.06 / 155.65
The USDJPY is consolidating at highs, with weak U.S. PMI data potentially pressuring the dollar further.
US Crude Oil Futures (FEB)
Resistance: 58.42 / 58.87 | Support: 56.92 / 56.46
Oil prices remain under pressure amid geopolitical risks and oversupply concerns.
Spot Gold
Resistance: 4,404 / 4,461 | Support: 4,221 / 4,163
Gold prices are consolidating around the USD 4,300 level following a sharp pullback.
Dow Futures
Resistance: 48,431 / 48,744 | Support: 47,719 / 47,401
U.S. equities are cautious amid fiscal uncertainty and political risks.
NAS100
Resistance: 25,566 / 25,836 | Support: 25,018 / 24,744
The NAS100 is consolidating near record highs, supported by rate-cut expectations.
BTC
Resistance: 89,086 / 89,821 | Support: 86,743 / 86,020
Bitcoin is consolidating around the 88,000–89,000 range, with macro uncertainty capping upside potential.
Enjoy trading!