Today’s market analysis on behalf of Ahmad Assiri Research Strategist at Pepperstone
December’s US CPI print delivered a largely uneventful inflation message on the surface, but the broader market response suggests investors are looking well beyond the headline numbers. Headline CPI rose 0.3% MOM, exactly in line with expectations, while core CPI undershot at 0.2% versus 0.3% expected. On a YOY basis, headline inflation held steady at 2.7%, while core inflation eased marginally to 2.6%, confirming the view that disinflation is continuing, albeit at a slower and more uneven pace.
Equity markets reacted with restraint. Both the S&P 500 and Nasdaq 100 closed lower by around 0.2% mainly driven by the banking sector on the back of potentially capped credit card interest rate at 10% nearly half the current APR average in a market size of 1.3 trillion dollars. The price action across the tape shows leadership thinning and dispersion widening in what’s likely a theme for the months ahead.
Gold and Silver Signal Acceptance at Higher Levels
The precious metals complex is currently telling the most compelling story in global markets. Silver has surged through fresh all time highs, while gold continues to consolidate near historically elevated levels, pushing firmly north of the 4,600 handle.
Gold’s price structure remains constructive. The market continues to print higher highs and higher lows, with pullbacks proving shallow and short-lived. Importantly, recent consolidation does not resemble exhaustion. Instead, it reflects acceptance at higher price levels, a key characteristic of sustained bull phases. In this context, gold appears to be building a base just below its upper range, suggesting preparation for a potential extension into a new wave of highs. On a longer term horizon, the current setup increasingly points toward the 5,000 level as a longer term target.
Silver’s move has been even more emphatic. Prices have accelerated into the upper-80s, reaching the 90 level, reinforcing what is becoming an increasingly unshortable trend. Upside ranges continue to expand, while downside follow through remains limited, a demand dominance by all means. Crucially, silver has absorbed profit taking without impairing the broader trend structure, keeping the path open toward uncharted territory. In relative terms, silver’s outperformance highlights a growing appetite for higher beta exposure within the metals complex.
The recent subpoena pressure on the Federal Reserve and the implied threat to central bank independence, has added to the metal rally. Fast moving capital is rotating aggressively toward metals, amplifying short term volatility and intraday swings. Yet when viewed through a longer term lens, the trend is unmistakable, a gradual, persistent repricing higher where volatility is smoothed by sustained demand.
Credit Cards, Policy Intervention and a Market Distortion Risk
That same policy risk is now extending beyond monetary affairs and into consumer credit.
Average US credit card APRs sit near 20% applied to a collective debt burden exceeding $1.2 trillion as of Q3 2025. The proposal to cap credit card interest rates at 10% is framed as a pro-growth, pro-consumer initiative ahead of the November midterms, offering relief to households strained by years of elevated prices and borrowing costs.
However, credit card lending is among the riskiest segments of consumer finance. Pricing reflects funding costs, capital requirements and default probabilities. Compressing that price administratively does not reduce risk. If enforced, the likely outcome would be tighter eligibility standards, with credit increasingly restricted to high quality borrowers for whom a 10% APR is economically viable. Lower quality consumers would face declining approval rates or frozen credit lines ultimately reducing consumption, directly contradicting the intervention’s stated objective.
This concern is already resonating in markets. As earnings season began, JP Morgan pushed back on the proposal. Management commentary highlighted that such a cap would be negative for both business and the broader economy as credit availability would shrink. While recent earnings beat expectations, share prices told a different story selling 4%, with bank stocks closing lower and the weakness spilling over into payments and financial infrastructure names.