Gold and silver plunged, silver went from rising 6% to falling 2%, gold fell below the $4,500 mark, and Lun copper soared more than 5%

Precious metals markets gave back gains after hitting record highs, with the sudden pullback coming after an unprecedented year-end rally.

In early Asian trading on Monday, spot silver plunged. Spot silver rose 6% to approach US$84/ounce and then fell straight down. It currently fell 2% to US$78/ounce during the day.

Spot gold fell short-term, falling below the $4,500 mark, down about $50 from its daily high. The price of platinum has also plunged, currently down 6% to US$2,318 per ounce, after rising by more than 2%.

The industrial metals and energy markets rebounded, with London copper prices soaring more than 5% to a record high, and WTI crude oil rebounding, rising 0.79% to US$57.19.

This technical pullback has not changed the long-term trend of precious metals. Gold is up about 70% this year and silver is up more than 150%, with both on track for their best annual performance since 1979. Silver has even outstripped gold, more than doubling this year. Its recent gains have been boosted by speculative inflows and continued supply dislocations in major trading centers following a historic short squeeze in October.

It is worth mentioning that in addition to the traditional positive logic such as the Federal Reserve's interest rate cut expectations and the central bank's gold purchases, the market is pricing in a new narrative - "commodity control." Goldman Sachs believes that metals are not only cyclical assets, but also strategic assets. This shift in positioning reflects the increased weight of geopolitical and supply chain security factors in commodity pricing.

The precious metal has actually outperformed the S&P 500's returns this year, a performance that has attracted inflows worried about the valuation of technology stocks. Some investors regard precious metals as the ultimate tool to hedge against the risk of the "AI bubble" and promote the transfer of funds from the stock market to the commodity market.

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