Market Update

Dear reader, welcome to the latest GoldRepublic newsletter! In just five minutes, we will fully inform you of current precious metal prices and the most relevant news that affects your investment in precious metals. Don't miss out on these valuable insights!

‍

1. Weaker U.S. labor market increases pressure on Fed

US employment is faltering. According to the ADP figures, the number of jobs in the private sector fell by 32,000 in November, the biggest decline since early 2023. Small companies (<50 employees) in particular lost many jobs: minus 120,000, the biggest loss since May 2020.

The wage picture is also weakening. Workers who changed jobs saw their pay rise by an average of 6.3%, the lowest level since February 2021, so the labor market, an important part of the Fed mandate, is cooling further.

The government shutdown delayed the official November jobs report, making these ADP figures heavier in the run-up to the Fed meeting next week. Investors now consider the chance of a rate cut at 90%. Less than a month ago, that chance was below 50%.

2. Trump hints at next Fed boss: Kevin Hassett

Donald Trump announced that he would announce his candidate for the Fed presidency in early 2026. At a meeting, he openly thanked Kevin Hassett, the current director of the National Economic Council, adding, “I guess a potential Fed chair is here too.”

Hassett is known as an optimistic forecaster, with, like Trump, more confident in productivity and deregulation as sources of disinflation than many current FOMC members. Under his leadership, the policy could possibly take a dovish turn.

On the contrary, some investors fear that Hassett, as a loyal Trump advisor, could make aggressive interest rate cuts to please the White House. The fear of political influence on monetary policy is thus returning.

3. Japanese long-term interest rates rise

In Japan, interest rates are rising. The 10-year yield rose to 1.89%, the 30-year yield even to 3.42%. The combination of rising inflation, cautiously tightening BOJ policy expectations, and concerns about budget spending is adding additional pressure. Market sentiment is shifting: Japan's zero interest rate era seems to be coming to an end.

4. German inflation surprises up

Inflation in Germany rose unexpectedly to 2.6% in November, the highest level in nine months. Economists had expected 2.4%. This increase contrasts with lower inflation rates in France and Italy, and reinforces the uncertainty towards the ECB interest rate decision later this month.

However, no action is expected from the ECB. Interest rates are expected to remain unchanged, despite the signal that price pressure in the euro zone has not completely disappeared.

5. Dutch inflation still too high

The provisional inflation rate for November is 2.9%, reports the CBS. That is only a fraction lower than October's 3.1%. Although the trend is slightly declining, the figure remains stubbornly above the ECB target.

For Dutch households, this means: savings are still losing purchasing power, while investments remain necessary to protect assets.