1. Stocks fell on Monday, with the woes of the three major indexes continuing in the final week of the year as an otherwise strong 2024 comes to a close. The benchmark S&P 500 dropped about 1.6%, while the tech-heavy Nasdaq Composite slid roughly 1.7%. The Dow Jones Industrial Average was off more than 1.6%. Stocks’ move lower came as the 10-year Treasury yield retreated from a seven-month high to hover near 4.56%. Stocks closed out last week with a Friday slide from Big Tech names like Tesla and Nvidia, with the Nasdaq Composite falling 1.5% and the S&P 500 down over 1%. The highly anticipated “Santa Claus” rally, which is statistically one of the most consistent seven-day positive stretches of the year for the S&P 500, has been a flop thus far. Since 1950, the S&P 500 has risen 1.3% during the seven trading days beginning Dec. 24, well above the typical seven-day average of 0.3%. In the current period, the S&P 500 is down less than 0.1%.
January 3rd, 2025
2. Gold prices were set to end a record-breaking year on a positive note on Tuesday as robust central bank buying, geopolitical uncertainties and monetary policy easing fueled the safe-haven metal’s strongest annual performance since 2010. As one of the best-performing assets of 2024, bullion has gained more than 26% year-to-date, the biggest annual jump since 2010, and last scaled a record high of $2,790.15 on Oct. 31 after a series of record-breaking rallies throughout the year. The metal is likely to remain supported in 2025 despite some headwinds from a stronger U.S. dollar and a slower pace of easing by the Federal Reserve. Bullion is often regarded as a hedge against geopolitical and economic risks and tends to perform well in low-interest-rate environments. “We expect gold to rally to $3,000 oz. on structurally higher central bank demand and a cyclical and gradual boost to ETF holdings from Fed rate cuts,” said Daan Struyven, commodities strategist at Goldman Sachs. Spot silver was steady at $28.96 per ounce, palladium rose 0.8% to $910.70, and platinum added 0.4% to $904.56. Silver is headed for its best year since 2020, having added nearly 22% so far. Platinum and palladium are set for annual losses and have dipped over 7% and 17%, respectively.
3. Housing contract activity picked up again in November as buyers shrugged off elevated mortgage rates and took advantage of higher inventory levels. The Pending Home Sales Index, which tracks contract signings on existing homes, rose 2.2% from October to 79, its highest reading since February 2023, according to the National Association of Realtors (NAR). An index level of 100 is equal to contract activity in 2001. It’s the fourth straight month of gains. Pending home sales are up 6.9% compared to November 2023. “Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” Lawrence Yun, NAR’s chief economist, said in a statement. Last month, housing contract activity rose in all regions of the country except for the Northeast. The South saw the largest month-over-month increase, improving to 5.2% from October and 8.5% from a year ago. All parts of the country saw more contract activity compared with November 2023, led by an 11.8% jump in the West. Although the market is picking up, 2024 is on track to be one of the slowest years for existing home sales in decades. High prices, coupled with elevated mortgage rates, have kept many potential buyers and sellers sidelined.
4. U.S. natural gas futures soared as the weather outlook for January shifted colder, raising demand prospects for the fuel used in heating and power generation. Gas for February delivery rose as much as 20% in New York. That’s the most since the contract started trading in 2012. Most-active futures climbed to the highest level in almost a year. The National Weather Service expects a higher chance of colder-than-normal weather across the U.S. East and Midwest in its latest 8–14-day outlook. That would be an abrupt shift from what’s until now been a mostly mild fall and early winter. The much colder outlook is “creating a buying frenzy,” Dennis Kissler, an energy trader and analyst at BOK Financial, wrote in a note Monday.
5. Some of the biggest lenders in the U.S. are beating a retreat from an UN-backed bank climate group. The latest big bank to announce it was leaving the Net Zero Banking Alliance is Morgan Stanley, which confirmed its exit Thursday following recent departures from Citigroup, Bank of America, Wells Fargo, and Goldman Sachs. The NZBA was formed in 2021 as part of the Glasgow Financial Alliance for Net Zero, and a number of banks touted their initial membership in the alliance as financial-sector commitments to net zero goals became a focus for Wall Street. Another climate coalition formed with an aim to limit greenhouse gases globally, Climate Action 100+, has lost JPMorgan Chase, State Street, BlackRock, and Pimco as members. Another affiliated group for insurers, the Net Zero Insurance Alliance, also experienced an exit of members in 2023.
6. Weekly unemployment claims hit their lowest level since April during the final full week of 2024. In the latest sign that layoffs remain low, data from the Department of Labor released Thursday morning showed 211,000 initial jobless claims were filed in the week ending Dec. 27, down from 220,000 the week prior and below the 221,000 economists had expected. Meanwhile, 1.84 million continuing claims were filed, down from the 1.89 million seen the week prior. Economists largely believe the continued low number of weekly jobless claims combined with relatively steady continuing claims reflects a “low hire, low fire” type of labor market.
7. Oil prices steadied in thin holiday trading, heading for a modest annual decline as the market braces for a global surplus in 2025. Brent futures traded near $74 a barrel, having initially advanced after factory activity expanded for a third month in China — a further sign that a raft of stimulus measures has fostered a tentative recovery. Crude has been stuck in a narrow trading range since mid-October, putting Brent on track for a second straight annual decline, albeit much smaller than last years of about 4%. U.S. benchmark West Texas Intermediate is little changed for the year. Bullish bets on WTI reached a four-month high in the penultimate week of 2024 as investors positioned for a possible turbulent year ahead.
8. The Euro fell to $1,029, its weakest level since November 2022, due to concerns about Europe’s economic prospects and optimism around the U.S. Economy. Europe faces subdued growth expectations, with potentially instability and structural issues in Germany and France. Meanwhile, a dovish stance by the European Central Bank has reduced support for the euro, while the Federal Reserve is expected to cut interest rates less aggressively than anticipated.
9. After essentially moving in lockstep with U.S. yields early in 2024, the strong relationship abruptly disintegrated mid-year. During this period, USD/JPY was more correlated with riskier asset classes such as stocks, suggesting carry trade flows were pushing the pair higher. Declining yields were ignored as USD/JPY rose, but as the BoJ continued to lift rates and economic growth faltered, it sparked an aggressive USD/JPY unwind. This doesn’t mean it will happen again, but if USD/JPY disconnects from U.S. Treasury yields next year, it may signal an eventual reversal.
A clash between BlackRock and the Federal Deposit Insurance Corporation over the money manager’s holdings of U.S. banks will now play out in the waning days of President Joe Biden’s administration. The FDIC has asked BlackRock to sign by Jan. 10 a “passivity agreement” that would codify greater checks on the money manager’s holdings of FDIC-supervised lenders, pushing back a deadline that was previously Dec. 31, 2024. The agreement FDIC has asked BlackRock to sign is similar to one announced last week with another giant money manager, Vanguard Group, that imposes new compliance requirements when the manager amasses more than 10% of all outstanding stock in an FDIC-supervised bank. BlackRock spent much of 2024 resisting the FDIC’s push for greater oversight, denying that the asset manager exerts undue control over companies through its investment stewardship activities. The “passivity” agreement FDIC wants BlackRock to sign is designed to assure bank regulators that the giant money manager will remain a “passive” owner of an FDIC-supervised bank and won’t exert control over a bank’s board.
Those who braved the housing market in 2024 faced one of the slowest sales years in three decades. 2025 is shaping up to be a little bit better. Many of the plights that kept would-be buyers and sellers sidelined this year, like 6% to 7% mortgage rates and home prices near record highs, aren’t going anywhere. The housing market has been effectively stuck since mortgage rates began their swift climb in 2022. Homeowners lucky enough to lock in rates around 3% in earlier years were suddenly reluctant to move if it meant taking on a new mortgage at a rate that had more than doubled. Median home prices are about 30% higher today than pre-pandemic, outpacing income gains made in the same period. Higher mortgage rates, rising insurance costs, and elevated property taxes add additional challenges for prospective buyers. The ongoing affordability problems mean any uptick in transactions is still likely to be well below historical averages.
The stock market faces its first major test of the year in the coming week, with investors counting on the U.S. jobs report to show a stable but not overheated economy that underpins expectations for equity gains in 2025. Stocks wobbled at the end of December and the start of January, cooling off after a torrid run. The benchmark S&P 500 closed 2024 with a 23% rise and posted its biggest two-year gain since 1997-1998. Prospects for a third straight standout year hinge in part on the strength of the economy, with labor market data among the most important reads into the economy’s health. “Investors are going to want to see confirmation that labor trends remain solid, which means the economic outlook probably remains firm,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial. “Any kind of data that suggests things are weakening a little bit more than expected I think could create volatility,” he said. Investors enter the year generally upbeat about the U.S. economy. A survey conducted at the end of last year found 73% of institutional investors said the U.S. will avoid a recession in 2025.
Volatility should be expected to remain high as investors will be closely watching for hints on the upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hope that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.
Trading Department – Precious Metals International Ltd.
Friday to Friday Close (New York Closing Prices)
| Dec. 27, 2024 | Jan. 3, 2025 | Net Change | ||
| Gold | $2,616.03 | $2,641.84 | 25.81 | -0.99% |
| Silver | $29.38 | $29.58 | 0.20 | 0.68% |
| Platinum | $921.50 | $942.44 | 20.94 | 2.27% |
| Palladium | $916.01 | $928.10 | 12.09 | 1.32% |
| Dow | 42992.58 | 42732.13 | -260.45 | -0.61% |
Month End to Month End Close
| Nov. 29, 2024 | Dec. 31, 2024 | Net Change | ||
| Gold | $2,616.03 | $2,625.31 | -35.13 | -1.32% |
| Silver | $30.65 | $28.86 | -1.79 | -5.84% |
| Platinum | $950.99 | $908.45 | -42.54 | -4.47% |
| Palladium | $986.60 | $915.31 | -71.29 | -7.23% |
| Dow | 44910.65 | 42544.22 | -2366.43 | -5.27 |
Previous Year Comparisons
| Jan. 5, 2024 | Jan 3, 2025 | Net Change | ||
| Gold | $2,042.02 | $2,641.84 | 599.82 | 29.37% |
| Silver | $23.16 | $29.58 | 6.42 | 27.72% |
| Platinum | $964.25 | $942.44 | -21.81 | -2.26% |
| Palladium | $1034.25 | $928.10 | -106.15 | -10.26% |
| Dow | 37466.04 | 42732.13 | 5266.09 | 14.06% |
Here are your Short-Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
| Support | 2622/2605/2591 | 29.53/29.15/28.93 |
| Resistance | 2653/2668/2801 | 29.75/30.14/30.36 |
| Platinum | Palladiumn | |
| Support | 927/905/891 | 926/893/876 |
| Resistance | 944/964/979 | 944/976/994 |