Markets Today: Silver Slides 4.5%, Gold Down 1.5% as 2025 Winds Down as Trump Eyes Russia/Ukraine Peace Deal

[Ben Graham]

Asia Market Wrap - Nikkei Slips, Topix Steady

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Japan's Nikkei index fell 0.44% on Monday, ending a two-day winning streak. This decline was driven by weak technology stocks, such as Advantest and Tokyo Electron, which followed a negative trend from Wall Street.

The market also slipped because several large companies traded "ex-dividend," causing their share prices to adjust downward naturally. While rubber manufacturers were the worst performers of the day, the broader Topix index managed to inch up 0.1%.

This small gain was helped by banking stocks, including Mitsubishi UFJ and Mizuho, which rose after reports suggested the Bank of Japan is considering further interest rate hikes.

Globally, markets remained steady near recent record highs following a strong rally last week.

Bank of Japan (BoJ) Summary of Opinions

Bank of Japan officials largely agree that continuing to raise interest rates is necessary to keep prices stable. Officials are becoming more confident that the economy is in a healthy cycle where rising wages and prices support steady growth.

Policymakers pointed out that strong corporate profits should allow wages to keep increasing, though they expect inflation to persist, partly due to currency issues. Because current interest rates are still considered too low, many officials warned that waiting to act would be risky.

Consequently, the bank raised its key interest rate to 0.75% at its December meeting, marking the highest level since 1995.

European Session - European Shares Inch Higher

European stocks started the final week of 2025 with small gains, capping off a strong year for financial markets. The region's main index rose slightly to reach its highest level since mid-November, while the broader market held steady at a record high.

Trading activity is expected to be quiet due to the upcoming New Year holidays, following a record-breaking session on Wall Street. Investors remain focused on the possibility of US interest rate cuts in 2026 and ongoing political developments.

On the political front, President Trump stated that a peace deal to end the war in Ukraine is "closer than ever," although difficult issues regarding the Donbas region remain.

This news weighed heavily on defense companies, causing stocks in that sector to fall by as much as 4%.

On the FX front, the Japanese yen recovered slightly on Monday, rising 0.3% against the US dollar after a sharp drop late last week. Traders are cautiously watching for potential interest rate hikes in Japan or government intervention during this quiet holiday trading period.

Despite this small recovery, the yen remains very weak against the Australian dollar, sitting just below a 17-month low. In other currency markets, the US dollar and Euro stayed mostly flat, while the British pound dipped slightly and the New Zealand dollar fell by 0.2%.

Meanwhile, cryptocurrencies saw strong gains, with Bitcoin jumping 2.2% and Ether rising 2.6%.

Currency Power Balance

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Source: OANDA Labs

Precious Metals Slide - Silver Down 4.5%

Precious metals prices dropped on Monday as investors decided to sell and cash in on recent profits.

Silver fell significantly after briefly passing $80 per ounce earlier in the day, while gold slipped back from near-record highs. The decline was largely driven by productive peace talks between President Trump and President Zelensky, which reduced the geopolitical fear that usually drives investors toward safe assets.

As a result, gold dropped 1.7% and silver fell 4.6%. Other metals were hit even harder, with platinum losing over 6% and palladium plunging more than 11%.

Oil on the Front Foot - Can it Continue?

Oil prices increased on Monday as investors paid close attention to peace talks between the U.S. and Ukraine, while also worrying that tensions in the Middle East could disrupt oil supplies.

These concerns pushed Brent crude up by 1.1% to $61.31 per barrel, while US crude rose by a similar margin to reach $57.39.

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Economic Calendar and Final Thoughts

Markets are still experiencing significant volatility despite it being the holiday season.

On the economic calendar front though, data releases will not be forthcoming until next week. This leaves geopolitical risks and potential repositioning ahead of the New Year as the primary market drivers to focus on.

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Chart of the Day - Silver (XAG/USD)

Silver has fallen after breaching the $80/oz handle.

The precious metal is approaching key areas of support though which could lend a hand to bulls looking for a return toward last weeks highs.

Immediate support rests at the 75.00 handle before the 100-day MA resting at 72. 26 comes into focus.

On the upside, 76.75 may prove to be hurdle for bulls before the psychological 80 handle comes back into focus once more.

Silver (XAG/USD) H1 Chart, December 29, 2025

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Source: TradingView.com (click to enlarge)

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