Oil shows modest recovery

The market will be closely watching Federal Reserve Chairman Jerome Powell's upcoming testimony before Congress, looking for further insights into the Fed's monetary policy stance. While robust economic data may delay any rate cuts—typically negative for non-yielding assets like gold—broader geopolitical tensions and inflationary fears are expected to continue providing support for gold prices in the near term.

Currencies

The Euro has experienced slight losses, though it may see some relief after the president’s comments about focusing on autos rather than broader European exports. After last week's tariff threats aimed at the auto sector, the EU made some tariff concessions, which may ease tensions temporarily. Nonetheless, the broader trade picture remains uncertain, with the potential for further tariffs continuing to shape market sentiment.

Commodities

Gold remains on an upward trajectory, trading near $2,910 per ounce. The yellow metal has been a significant beneficiary of growing market uncertainty.

China's central bank has been active in diversifying its reserves, with gold purchases rising for the third consecutive month in January. Despite historically high prices, China continues to expand its gold holdings. Additionally, a new initiative allowing major Chinese insurers to invest in gold could unleash a significant wave of investment, potentially adding up to $27.4 billion in demand for the precious metal. This move could further support gold's bullish outlook.

WTI oil prices have briefly recovered to around $71.8, rebounding from earlier lows. However, the price went back to $71.5. The recovery lacks strong bullish momentum, with market focus still on global demand and supply conditions.