Global markets closed the week on a broadly positive note, supported by lighter-than-expected US inflation data that improved the outlook for lower interest rates in 2026 and recovery in AI-related stocks.
The US dollar staged a modest recovery, gaining around 1 percent from more than two-month lows below 98 and ending the week up 0.3 percent at 98.7. However, the rebound was driven more by pronounced weakness in the Japanese yen than renewed confidence in US growth. The yen came under pressure after the Bank of Japan raised its policy rate to 0.75 percent, the highest level in three decades, amid rising inflation.
Rather than supporting the currency, the move unsettled markets and triggered renewed yen selling, indirectly lending support to the dollar. Elsewhere, the European Central Bank left rates unchanged for a fourth consecutive meeting, while the Bank of England cut its policy rate by 25 basis points to 3.75 percent, citing easing inflation and mounting economic headwinds.
US equities were supported by strong gains in Oracle and Nvidia, easing concerns around the AI sector. Markets also benefited from softer-than-expected US inflation data, with November headline CPI undershooting forecasts and core inflation slowing to its weakest pace since early 2021. The US unemployment rate rose to 4.6 percent, its highest level since 2021, reinforcing expectations for rate cuts later in 2026, even as near-term policy is likely to remain on hold.
This also helped precious metals extend their rally. COMEX gold surged to fresh all-time highs above $4,400 per ounce before settling near $4,387, while COMEX silver jumped nearly 9 percent to a record $67.7 per ounce on strong inflows, tight supply, and robust industrial demand. Additional upside risks emerged after China announced new silver export licensing requirements from 2026–27.
On the weekly chart, MCX Silver futures witnessed an all-time high closing with weekly gains of more than 8 percent. The fourth consecutive weekly gains confirm the extreme bullishness in the counter. On the daily chart, price has been continuously holding above the 20 EMA and other medium term averages, suggesting that the short-term bullish bias remains intact. As long as the price stays above the immediate support of Rs 2,00,000 per kg, it could move higher in the coming week toward the initial resistance at Rs 2,25,000. A breakout and sustained trade above this level could accelerate the momentum towards Rs 2,40,000. However, a break below Rs 2,00,000 could pause the current momentum and send the counter in a sideways bias.
Base metals on the LME ended the week on a mixed note, with copper outperforming while zinc lagged. Copper rose more than 3 percent to close above $11,880 per tonne, holding near multi-month highs despite bouts of volatility. Zinc eased to around $3,072 per tonne. The broader tone was supported by the softer US inflation backdrop, which reinforced confidence that the Federal Reserve’s easing cycle still has room to run following its third consecutive rate cut. Although policymakers remain cautious on the pace of further easing, markets are increasingly pricing in additional rate reductions into 2026, providing a medium-term tailwind for industrial metals. Copper remained firm amid ongoing supply disruptions in Chile and Peru, low visible LME inventories, and continued metal flows into the US ahead of potential tariff measures, which have tightened availability elsewhere.
Meanwhile, WTI crude oil fell to $54.98 per barrel, its lowest level since 2021, pressured by oversupply concerns and optimism surrounding progress toward a potential Ukraine peace deal after Trump stated that an agreement to end the war was closer than ever following talks with Ukraine’s President Zelenskiy and European leaders. Prices later attempted a rebound toward $57 per barrel, supported by escalating geopolitical tensions following reports that the US is preparing a fresh round of sanctions on Russia’s energy sector. Trump also ordered a “total and complete” blockade of all sanctioned oil tankers entering or leaving the country, adding further support to prices.
With the upcoming holiday week likely to see thinner trading volumes, price action may be subdued. Only a handful of economic releases are scheduled during Christmas week, notably US GDP, ADP employment data, and weekly jobless claims, as investors assess the health of the US economy and look for further clues on the timing of the next Federal Reserve interest-rate cut.
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