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As we head into December, two themes stand out that could shape markets over the next few weeks: expectations for rate cuts by the Federal Reserve (the Fed) — and divergences within the metals complex, particularly between gold, silver and copper.

Rate-cut hopes & the possibility of a “Santa rally”

Many market participants now assign a high probability to a 25 basis-point cut by the Fed in December.

If rates do come down, that tends to benefit risk assets. Lower interest rates reduce the attractiveness of bonds and cash, and make equities and cyclical assets more appealing — setting the stage for a potential end-of-year rally (often dubbed a “Santa rally”).

That said, even with market optimism, some Fed officials remain cautious. The decision is not guaranteed: there’s still debate inside the central bank over whether to pause or cut.

All else equal, though, softer monetary policy could provide a meaningful tailwind for both equities and risk-sensitive commodities.

Gold vs Silver & Copper — diverging dynamics

Gold is increasingly trading like a monetary asset rather than an industrial one. It benefits substantially from central bank purchases, and from investors seeking a safe haven or inflation hedge when macro conditions look uncertain.

By contrast, Silver and Copper are much more linked to real-economy demand: manufacturing, construction, renewable energy, industrial production, etc. Their prices often reflect cycles in industrial demand rather than purely monetary-policy or safe-haven drivers.

This divergence means that while gold might respond quickly to rate cuts or central-bank moves, silver and copper will depend more on how robust global industrial activity remains — which may pull them in a different direction.

Bottom line: A December rate cut from the Fed could trigger a favorable macro backdrop for both risk assets and interest-rate sensitive commodities — offering a plausible setup for a “Santa rally.” But within the commodity space, not all metals stand on the same footing. Gold is being driven ever more by monetary-policy and reserve demand, while silver and copper remain tethered to industrial demand cycles.