US Recession Risk Is Rising While Gold, Silver, and Copper Rip: The Same Macro Can Do Both
For professional investors & macro traders. This is risk/judgment input, not investment advice.
Data timestamps: market quotes referenced below are as of Dec 23, 2025 (UTC) where noted.
Executive summary (what’s actually going on)
Markets can look “illogical” when you force them into a single narrative. Right now there are two overlapping regimes:
Late-cycle slowdown risk is building (labor cooling, weak manufacturing, depressed expectations, tighter credit transmission, tariff uncertainty).
Simultaneously, the USD is weakening and supply-side constraints are tightening in metals, pushing gold/silver (monetary + hedge demand) and copper (structural deficit + tariff stocking) higher.
That combination can produce exactly the tape you’re describing: violent intraday reversals, stop-runs, and mean-reversion chop, even while the higher-timeframe trend in metals stays bid.
1) The recession-risk case: not “certain,” but no longer cosmetic
A. Labor is softening (and the market cares more about the direction than the level)
Unemployment rate hit 4.6% in Nov 2025.
Sahm Rule (a simple early-warning metric) shows 0.43 in Nov 2025 (below the classic 0.50 trigger, but uncomfortably close).
Why this matters: metals and equities don’t wait for NBER to declare recession. They reprice on marginal deterioration and on policy reaction functions.
B. Manufacturing is still contracting
ISM Manufacturing PMI: 48.2 (Nov), deeper in contraction.
Industrial commentary also highlights disruption from tariffs and uneven sector outcomes.
Translation: cyclicals don’t need to collapse for recession risk to rise. A long stretch sub-50 is enough to make investors price “downside tails.”
C. Leading indicators are still sliding
Conference Board LEI fell to 98.3 in Sep 2025; six-month change -2.1% (as reported).
D. Sentiment is consistent with late-cycle fragility
Conference Board Consumer Confidence fell to 89.1 (Dec 2025); the Expectations component is 70.7, below the “recession-warning” threshold often cited by the Conference Board.
E. Rates are no longer the headwind they were, but the
lag
still bites
The Fed cut the target range to 3.50%–3.75% (Dec 10, 2025).
10Y Treasury yield around 4.16% (Dec 19) on FRED.
Cleveland Fed’s model shows ~17.1% recession probability (one-month ahead) in the table you referenced.
Bottom line: recession risk is not “guaranteed,” but enough building blocks are present that “growth is fine” is no longer a free assumption.
