Market Overview

Financial markets opened December with heightened volatility driven by shifting expectations for Federal Reserve policy, geopolitical uncertainty, and adjustments across global commodities. The U.S. dollar weakened further as traders increased bets on a December rate cut, while gold extended its multi-month uptrend to fresh two-week highs. Conversely, crude oil closed lower for the fourth straight month, marking its longest losing streak since 2023.

The equity markets in the U.S. and Europe posted modest gains, but underlying sentiment remains cautious as investors await the Federal Reserve’s December meeting — now nearly fully priced for a policy pivot.

Key Macro Drivers

Fed Rate-Cut Expectations Surge

Following a series of softer-than-expected U.S. economic indicators and the end of the government shutdown, markets have dramatically raised the probability of a December rate cut.
FedWatch now shows an 87% probability of a cut — up from 71% a week earlier.

The USD Index posted its weakest weekly performance since July, falling 0.61%, as traders shift toward defensive assets.

Geopolitics Weigh on Oil

Oil markets remain under pressure as OPEC+ prepares for an upcoming production-capacity review.
At the same time, stalled peace negotiations between Ukraine and Russia add uncertainty but fail to materially lift prices due to persistent supply concerns.
U.S. crude output hit a record 13.84 million barrels/day, intensifying fears of oversupply.

Precious Metals Rally

Gold and silver surged sharply as investors seek safety ahead of expected monetary easing and slowing global growth into 2026.
Silver registered a historic high, and platinum-group metals saw multi-week gains.

Market Highlights

• USD Index: Fell 0.05% Friday, closing at 99.48 — worst weekly performance since July.

• U.S. Treasury Yields:

  • 10-year closed at 4.018%

  • 2-year fell to 3.502%

• Gold: Jumped 1.5% to close at 4219.20; reached 4230.41 during Asian session Monday.

• Oil:

  • WTI closed at 58.56

  • Brent closed at 62.89
    Both posted fourth consecutive monthly declines.

• Silver: Hit a historic high of 56.52.

• Canadian Dollar: Strengthened as Q3 GDP beat expectations.

• CME Outage: An 11-hour data center cooling failure disrupted trading but had limited market impact due to holiday-thinned liquidity.

Detailed Technical Analysis

USD Index (DXY)

USD found resistance at 99.85 and support at 99.35.
If USD holds above 99.25, upward momentum may extend toward 99.75–100.00.

• Resistance: 99.70–99.75 / 99.95–100.00

• Support: 99.25–99.30 / 99.10–99.15

EUR/USD

EUR/USD held support at 1.1555 and resistance at 1.1610.
If capped below 1.1625, a decline toward 1.1570–1.1535 is expected.

• Resistance: 1.1620–1.1625 / 1.1635–1.1640

• Support: 1.1570–1.1575 / 1.1535–1.1540

Gold (XAU/USD)

Gold holds support at 4149 and resistance at 4227.
If gold holds above 4195, upside targets are 4242–4273.

• Resistance: 4241–4242 / 4272–4273

• Support: 4195–4196 / 4164–4165

Global Market Wrap

U.S. Equities

• S&P 500: +0.54%

• Dow Jones: +0.61%

• Nasdaq: +0.65%

S&P 500 and Dow both recorded a seventh consecutive monthly gain, while Nasdaq halted its 7-month winning streak.

European Equities

• DAX: +0.29%

• FTSE 100: +0.27%

• Euro Stoxx 50: +0.27%

Precious Metals

• Gold: +1.49% to 4218.77

• Silver: +5.61% to 56.37

Silver hit a record high fueled by speculative demand and tightening supply conditions.

CWG Markets Outlook

The market remains firmly driven by rate-cut expectations. If the Fed confirms a dovish pivot in December, USD may face continued downward pressure while precious metals retain strong upside potential.

Oil remains vulnerable given high U.S. output and OPEC+ internal challenges. Equity markets may face volatility as liquidity returns post-holiday.

CWG Trading Recommendations

These strategies apply primarily to margin accounts (spot traders may use them as reference).

USD Index: Buy near 99.25–99.75 range low; 20-point stop; target upper range.
EUR/USD: Sell at 1.1625; 25-point stop; target 1.1570.
GBP/USD: Sell at 1.3270; stop 30 points; target 1.3210.
USD/CHF: Buy at 0.8015–0.8065 range low.
USD/JPY: Sell at 156.50; stop 35 points; target 155.60.
AUD/USD: Sell at 0.6570; stop 20 points; target 0.6525.
USD/CAD: Sell at 1.4040; stop 40 points; target 1.3920.
Gold: Buy at 4195; stop $20; target 4242.