Gold prices have reached a new record high, continuing their historic rally as investors navigate stabilizing developments in Japan’s bond and currency markets alongside a substantial array of U.S. economic data in the lead-up to the holiday season. Precious metals exhibited superior performance, whereas equities displayed a range of mixed signals. Positioning data indicates an increasing sense of caution lurking beneath the surface of year-end markets.

Gold reached a new all-time high on Tuesday, representing the 50th session this year in which the metal has established a new record. This trend reflects investors’ ongoing preference for precious metals in the context of declining yields, currency fluctuations, and the need for long-term inflation protection. Gold Futures reached a peak of $4,530.30 per ounce, establishing a new all-time high, while spot prices for gold climbed to $4,497.82 per ounce. Yardeni Research has revised its forecast for gold prices in light of the recent increase. “When the price of an ounce of gold rose above $3,000 at the start of this year, we projected it would reach $4,000 by the end of this year and $5,000 by the end of next year,” Yardeni stated. “We are raising our year-end 2026 target to 6,000.” We still anticipate that $10,000 will be reached by the end of the decade. Silver Futures reached a new high, while Platinum Futures and Palladium Futures continued to advance. Conversely, Brent Oil Futures and Crude Oil WTI Futures exhibited minimal movement.

In Japan, government bonds and the yen exhibited indications of stabilization subsequent to the pronounced fluctuations triggered by the Bank of Japan’s 25 basis-point rate increase on Friday. Yields experienced a notable increase following indications from policymakers that additional tightening measures may be forthcoming. However, the subsequent decline in the yen introduced ambiguity regarding the central bank’s capacity to advance its agenda without exacerbating inflationary pressures. Currency pressures began to ease following Finance Minister Satsuki Katayama’s assertion that Japan possessed a “free hand” to intervene in foreign-exchange markets, characterizing recent fluctuations as speculative rather than rooted in fundamental factors. The USD/JPY pair experienced a decline of approximately 0.7% on Tuesday. The bond markets exhibited a tendency to recover from some of their recent declines. Japan’s 10-Year yields decreased by approximately 4.6 basis points, whereas Australia’s 10-Year yields saw a decline of 3.1 basis points. In a bid to foster a more measured atmosphere, Prime Minister Takaichi stated her intention to refrain from pursuing “irresponsible” tax cuts, thereby alleviating worries regarding fiscal strain in conjunction with a more stringent monetary policy.

Focus shifts to an active schedule of U.S. economic indicators, representing the last set of data releases prior to the Christmas holiday. Investors are set to receive a delayed third-quarter GDP report later in the session; however, it is important to note that this data is backward-looking and encapsulates economic conditions that prevailed before the government shutdown. Attention is expected to center on the Conference Board’s December consumer confidence reading, especially following the decline of November’s index to its lowest point since the upheaval associated with Liberation Day in April. Additional data points encompass November’s industrial production figures, preliminary durable goods orders for October, and the manufacturing index from the Richmond Fed.

In corporate news, Novo Nordisk shares surged over 5% in Copenhagen following the company’s receipt of U.S. approval to market a pill formulation of its highly successful obesity treatment Wegovy. The decision represents a notable advancement in the accessibility of obesity medications, extending beyond injectable forms and potentially enlarging the addressable market. In other developments, Oersted AS shares have found stability on Tuesday following the Trump administration’s decision to suspend leases for multiple offshore wind projects currently under construction along the U.S. East Coast, citing national security considerations. The decision has a direct impact on Ørsted’s Revolution Wind and Sunrise Wind developments, as well as other significant projects such as Vineyard Wind 1, Dominion Energy’s Coastal Virginia Offshore Wind project, and Equinor’s Empire Wind 1. The company experienced a decline exceeding 13% after the announcement, representing the most significant drop among offshore wind developers, whereas Dominion Energy’s shares decreased by 3.7% on Monday.

Positioning data indicates that investors are exhibiting increased caution as the year draws to a close. Strategists at Citigroup, under the guidance of Chris Montagu, reported that investors increased their short positions in U.S. equity-index futures during the previous week, resulting in net positioning remaining close to neutral. Investment in U.S. large caps has diminished, whereas sentiment towards the Russell 2000 has shifted to a bearish stance, contrasting with the previous week’s optimism. Net profit levels exhibited an upward trend across the majority of indices, with the Nasdaq standing out as a notable exception.