Before the Bell: Commodities Steal the Show

Silver and copper prices are hitting new records, while investors appear to be taking some chips off the table as the year draws to a close.

With European stock markets still closed on Friday, investors who wanted to trade had to focus on Wall Street. There was little festive cheer, however. Both the S&P 500 and the Nasdaq ended Friday close to flat, with trading volumes well below average. Nvidia (+1%) announced a licensing deal with chip specialist Groq and will use Groq’s processors in its own products. A number of engineers are also making the move to Nvidia. Among the biggest losers on Wall Street was Moderna (-4.7%). The stock had surged by nearly 50% in December, prompting investors to lock in some profits after the recent rally. Electric vehicle manufacturers such as Tesla (-2.1%) and Lucid Group (-3.4%) were also among the steepest decliners.

In Asia, markets are showing little movement today, with both the Hang Seng Index and the Topix hovering around the flat line. Where there is significant action this morning is in the commodities sector. The silver price briefly climbed above 80 dollars per ounce, setting a new record. Copper prices are also continuing to break records and are on track for their strongest annual gain in more than ten years. The corporate calendar is relatively empty this week as markets head toward the New Year.

Looking Ahead to 2026

One of the key investment themes for 2026 is likely to be the substantial fiscal stimulus being rolled out by governments worldwide. China’s Ministry of Finance announced on Sunday that Beijing will make targeted investments in the technology sector and advanced manufacturing. Additional fiscal stimulus is expected to support economic growth, which should be positive for both the economy and equity markets. Companies such as Alibaba stand to benefit. In Germany, increased spending on infrastructure and defense from 2026 onward is also expected to gradually filter through to the chemicals sector, defense companies, and construction. The stimulus package amounts to more than 500 billion euros over the coming years. In the United States, the budget deficit is expected to remain around 5% to 6% in 2026, meaning liquidity will continue to flow. What exactly 2026 will bring for markets remains uncertain, but with solid growth, low interest rates, and government stimulus, the foundations for 2026 look extremely strong.

A Silver Christmas

Is now a good time to buy silver? The silver price jumped by 10% on Friday, breaking record after record. China has introduced export restrictions on silver starting January 1, adding further pressure to the market. China is a net exporter of silver, and an estimated 121 million ounces will now require an export license before leaving the country. This is tightening supply. The physical fundamentals of silver look strong, with low inventories and demand currently exceeding supply—but the key question is how long this will last. A significant portion of current demand comes from financial speculators attracted by rising prices. This is one of the reasons why the commodities exchange CME is increasing margin requirements for silver starting today. In practice, this means traders need more capital to hold silver positions, often leading to forced liquidations. For now, the market does not seem convinced that the silver rally is sustainable. Silver miners such as Pan American Silver and Hecla Mining gained 20% and 18% respectively over the past month, while the silver price itself surged nearly 50%. The longer silver prices remain at these levels, the greater the chance that mining stocks will eventually catch up. For now, however, the market appears to view the current rally as a largely temporary phenomenon.

Did you know…

that silver conducts electricity better than any other metal—even better than copper? This is why small amounts of silver are commonly used in smartphones, computers, and electric vehicles.

This article was translated from Dutch and was originally published on Spaarvarkens.be.