European Midday Briefing: Gold Hits Record High on Geopolitical Tensions, Fed Rate-Cut Hopes

Stocks

Summary:

European stocks slipped in thin holiday trading, while gold and silver hit record highs on safe-haven demand and Fed rate-cut hopes. Oil rose on Venezuela tensions, yields climbed, the dollar steadied, and key U.S. data looms.

MARKET WRAPS

Stocks:

European shares fell as the holiday-shortened trading week kicked off and investors turned their attention to a handful of economic data due to be released this week.

Prices of gold and silver climbed to record highs on Monday, amid hopes of further U.S. Federal Reserve rate cuts next year and growing geopolitical tensions. Oil futures also rose.

"Investors are increasingly positioning for looser U.S. monetary policy into 2026, a supportive backdrop for nonyielding assets, while demand has been further underpinned by sustained central-bank purchases and steady inflows into gold-backed [exchange-traded funds]," MUFG said.

Traders are currently pricing in two rate cuts by the Fed in 2026, even though delayed data on the job market and inflation offered little clarity about the state of the U.S. economy.

Data on U.S. third-quarter economic growth and durable goods orders will be published on Tuesday along with the Conference Board's consumer confidence survey. Liquidity looks set to be thin this week with many traders on a break for Christmas.

In Europe, data is thin on the ground over the holiday period, while the European Central Bank's latest economic updates left investors in a cautiously optimistic mood entering next year, making any change in interest rates unlikely in the near term.

On Monday, U.K. GDP data showed the economy grew just 0.1% in the third quarter compared with the previous quarter. Although growth was unrevised, the "shape of growth is a bit healthier and less reliant on the public sector than previously estimated," Capital Economics said.

U.S. stock and bond markets close early Wednesday and are closed Thursday for the Christmas holiday.

Shares on the Move

London and South African miners climbed at the European bell as precious metals hit record highs .

Shares of European semiconductor companies rose after Friday's U.S. tech-rally, driven by a potential Oracle-TikTok deal . Oracle might host TikTok's U.S. user data under a new U.S.-China arrangement that allows the app to continue operating in the U.S.

U.S. Markets:

Stock futures were up on Monday as investors held up hope for a Christmas rally .

Contracts tied to the Nasdaq-100 were leading gains as technology shares rebounded from a volatile period.

Forex:

The dollar traded steady as investors look ahead to a few U.S. economic data releases this week.

Sterling rose after the U.K. GDP data while the euro fell.

Bonds:

Treasury yields rose, reversing last week's falls. They tracked a rise in Japanese government bond yields after the Bank of Japan raised interest rates on Friday, with a further increase looking likely.

Energy:

Oil prices rose in early trading as the U.S. ramped up pressure on Venezuela, raising concerns over supply disruptions in the region.

"These geopolitical developments have helped put a floor under oil prices , as faster than expected OPEC+ output increases, rising production outside the group, and subdued global demand have kept the market oversupplied," said MUFG.

Metals:

Prices of gold and silver climbed to new records on the back of geopolitical tensions that typically enhance their safe-haven allure.

Iron

Iron ore rose. Prices were likely to trade in a sideways range as it faces supply-related pressures from increased shipments while seeing support from steel mill profit rebounds after cuts in production, driving inventories below seasonal norms, Nanhua Futures said.

EMEA HEADLINES

Harbour Energy to Buy LLOG Exploration for $3.2 Billion

Harbour Energy said it is buying LLOG Exploration from LLOG Holdings for $3.2 billion, marking a strategic entry into the Gulf of Mexico, which the U.S. now calls the Gulf of America.

The oil-and-gas producer said Monday that the deal includes a $2.7 billion cash payment, with the rest payable in ordinary shares.

AstraZeneca Drug Combination Falls Short of Goal in Lung-Cancer Trial

AstraZeneca said its experimental drug ceralasertib in combination with approved cancer treatment Imfinzi didn't meet the primary goal of a late-stage clinical trial for advanced lung cancer.

The U.K. pharmaceutical company said Monday that results of the study showed the ceralasertib combination didn't reach the primary goal of overall survival compared with the standard of care in patients with locally advanced or metastatic nonsmall cell lung cancer.

Uber, Lyft Tie Up With Baidu for U.K. Robotaxi Tests Next Year

Baidu is teaming up with ride-hailing platforms Uber Technologies and Lyft to begin trials for its self-driving vehicles in the U.K., as the race to introduce robotaxis continues to intensify.

Uber on Monday said it would begin a pilot program in London with Baidu's robotaxi unit, Apollo Go, in the first half of 2026, under the U.K.'s plan to start trials for self-driving vehicles. The companies first announced their partnership to deploy self-driving cars globally on Uber's platform in July.

In Germany, Everyone Is a Defense Manufacturer Now

FRANKFURT-Across Germany, railcar factories are being retooled to build military vehicles, auto suppliers are joining with defense contractors, and former soldiers are suddenly hot commodities in the jobs market.

After Berlin pledged to spend more than half a trillion dollars on defense in the next decade, manufacturers facing stubborn economic stagnation and falling exports to the U.S. and China are scrambling to reinvent themselves as military vendors.

GLOBAL NEWS

Gold Rockets to Record High on U.S. Rate-Cut Hopes, Haven Demand

Gold prices reached a record high on Monday, surging past the $4,400-an-ounce mark on growing expectations of further U.S. interest-rate cuts next year and heightened geopolitical risks spurring safe-haven demand.

Futures in New York climbed 1.3% to $4,445.70 an ounce in early European trading after reaching $4,453 earlier in the session, while spot gold rose 1.3% to $4,388.77 an ounce. The precious metal has risen around 68% this year and is on track for its biggest gain since the inflationary shock of 1979.

Ten-Year JGB Yield Hits 26-Year High After BOJ Rate Increase

Japanese government bond yields continued their ascent, with the 10-year yield hitting a 26-year high, on expectations for further rate increases by the Bank of Japan after the central bank raised its rate to the highest in three decades on Friday.

The 10-year yield rose 8.0 basis points to 2.100% on Monday, its highest level since February 1999.

China Vanke's Brewing Crisis Suggests Limited Property Easing to Come

China Vanke, once the country's largest home developer, is no longer too big to fail.

As the state-backed property giant buckles under the weight of its debt, the government has so far refrained from stepping in. Analysts say that sends a clear message: Beijing isn't coming to the sector's rescue.

How Beijing Built an Arms Industry to Rival the West

In 2016, Beijing launched a new aerospace conglomerate called Aero Engine Corp. of China. It had a challenging mandate: to develop top-line aircraft engines, a technology China had long struggled to master.

Less than a decade later, Beijing's newest stealth fighters are entering service with what officials call "Chinese hearts," or indigenously made engines.

Justice Department Official Says It Pulled Some Epstein Files to Redact Victims

A top Justice Department official said Sunday that the agency temporarily removed some newly public Jeffrey Epstein files to address complaints from victims about the agency's failure to redact their images or information.

The Justice Department removed more than a dozen photos on Saturday, including one with an image of President Trump, shortly after they were released as mandated by Congress. Friday's release was criticized by lawmakers for falling short of their demands: The agency didn't release all of its materials and some of the documents were heavily redacted.

Returning Russian POWs Pay Heavy Price for Choosing Surrender Over Death

When a self-described patriotic, middle-aged Russian soldier was released from a prisoner-of-war camp in Ukraine earlier this year, he called his family to tell them he was alive, free and back on Russian soil. As the phone was passed around, he told them he might be back in time for his son's birthday in a few weeks' time.

He never made it. Instead, he was subjected to weeks of questioning by Russia's security services-then sent back to the front. Soon he went missing again on the front lines near the occupied Ukrainian city of Donetsk. This time, his relatives fear he is dead. One likened the situation to being caught in a circle of hell.

U.S. Coast Guard Chasing Another Tanker Involved in Shipping Venezuela Oil

The U.S. Coast Guard is pursuing an oil tanker involved in transporting oil from Venezuela, according to three U.S. officials, part of an accelerating effort by the Trump administration to block ships from moving the country's crude.

The attempted interdiction comes a day after the U.S. apprehended an oil tanker that wasn't on its sanctions list and after President Trump in a social-media post last Tuesday ordered a "total and complete blockade" of sanctioned tankers going into and out of Venezuela.

Source: morningstar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data