China's Overseas Investment Surges, Pivoting to Energy & Africa

President Trump began the week with a stark warning for Iran, stating that "bad things" would likely happen if a new deal isn't reached. Speaking to reporters from the Oval Office, Trump confirmed that significant U.S. naval assets were en route to the region.

"We have ships heading to Iran right now, big ones - the biggest and the best - and we have talks going on with Iran and we'll see how it all works out," he said. "If we can work something out, that would be great and if we can't, probably bad things would happen."

While expressing a desire for a negotiated settlement, Trump remained uncertain about the outcome, adding, "I'd like to see a deal negotiated. I don't know that that's going to happen." For its part, Iran appears willing to engage, having little to lose from direct talks at this stage.

Negotiations Relocate from Turkey to Oman

A key logistical hurdle has emerged over the location of the potential negotiations. Initial reports suggested the talks would take place in Istanbul, Turkey. However, the venue now appears to have shifted to Oman, a change that threatens to complicate the process before it even starts.

According to a report from Axios, the request to move the talks came directly from Tehran. The Trump administration has reportedly agreed to this change.

Diplomatic efforts shift as officials arrive for potential U.S.-Iran negotiations in Oman.

Iran Pushes for Bilateral-Only Format

The venue change is not Iran's only condition. Tehran is also pushing to alter the format of the discussions. According to Axios, Iran wants the negotiations to be strictly bilateral, involving only the U.S. This would exclude the several Arab and Muslim countries that were expected to attend as observers.

A source familiar with the matter told Axios that this demand is linked to Iran's desire to keep the focus narrow.

Sticking Point: Nuclear Program vs. Ballistic Missiles

The most significant challenge will be the scope of the negotiations. Iran is prepared to discuss its nuclear program but has refused to include its ballistic missile arsenal on the agenda, which it considers vital for national security, particularly in a potential conflict with Israel.

The Axios source noted that Iran wants "to limit the talks to nuclear issues and not discuss things like missiles and proxy groups that are priorities for other countries in the region."

Military Tensions and Regional Pressure

Adding to the tense atmosphere, Trump made another pointed comment on Tuesday, referencing a past operation. "They had a chance to do something a while ago, and it didn't work out. And we did 'Midnight Hammer', I don't think they want that happening again," he said.

In response, Tehran has warned it is prepared to retaliate forcefully against any attack, even if it leads to a wider war. Iranian officials stated that their military and missile forces are on high alert and that Tel Aviv would be targeted in the event of U.S. aggression.

Meanwhile, Israel is reportedly lobbying the White House to pursue regime change in Tehran. However, the Trump administration does not appear ready to take such a drastic step, with some reports suggesting the Pentagon would need more time to position its assets for such a scenario.

The US Treasury will maintain its current debt-issuance strategy, confirming it will not make significant changes to its bond auction schedule in a move that met dealer expectations. This decision comes despite market speculation that officials might intervene to bring down longer-term borrowing costs.

"Steady as She Goes": No Change to Auction Sizes

In its quarterly refunding statement on Wednesday, the Treasury Department said it expects to keep auction sizes for nominal notes, bonds, and floating-rate notes (FRNs) unchanged "for at least the next several quarters." This forward guidance continues a policy that has been in place for the last two years.

John Canavan, lead analyst at Oxford Economics, described the announcement as "very much steady-as-she-goes," reaffirming the department's commitment to its current path.

Looking ahead, the Treasury said it "continues to evaluate potential future increases to nominal coupon and FRN auction sizes," focusing on structural demand trends and the potential costs and risks of different issuance profiles.

Monitoring the Fed and Market Demand for Bills

While its strategy for longer-term debt is stable, the Treasury is closely watching developments in the market for bills, which mature in a year or less. The department noted it is "monitoring" two key factors:

1. The Federal Reserve's Bill Purchases: The central bank is buying $40 billion in Treasury bills per month until April to ensure the banking system has ample reserves.

2. Private Sector Demand: The Treasury is also keeping an eye on "growing demand for Treasury bills from the private sector."

The department has increasingly relied on bills to fund rising federal spending.

Market Speculation Meets Predictable Policy

Before the announcement, some market participants speculated that the Treasury might take aggressive steps, such as reducing bond issuance, to help lower yields. These long-term yields serve as crucial benchmarks for mortgages and other loans.

However, this speculation ran counter to the views of most dealers. "While the administration's focus on affordability measures has brought back questions about potential efforts to lower borrowing costs via more active adjustments to the issuance mix, we do not expect Treasury to do so at this point," wrote Goldman Sachs Group Inc. strategists William Marshall and Bill Zu.

Any move to cut sales of bonds or 10-year notes would have contradicted the Treasury's long-standing pledge to be "regular and predictable" in its debt management—a principle Treasury Secretary Scott Bessent reaffirmed in a November speech.

Future Uncertainties and the Fed's Next Move

The Federal Reserve's ongoing bill purchases reduce "the risk of Treasury oversupplying" the market, according to a preview from Morgan Stanley strategists led by Martin Tobias.

However, the Fed's plans beyond April are unclear. This uncertainty is heightened by the nomination of Kevin Warsh to become the next Fed chair in May. Warsh has previously advocated for shrinking the central bank's securities portfolio, a policy shift that could impact the market.

Upcoming Refunding Details

The Treasury announced that its refunding auctions next week will total $125 billion. This refunding is expected to raise approximately $34.8 billion in new cash.

Gold prices surged on Wednesday, reclaiming the key $5,000 level as escalating tensions between the United States and Iran triggered a flight to safety among investors. The precious metal is bouncing back after its worst two-day sell-off since 1983.

As of 08:45 ET, spot gold was trading 1.9% higher at $5,041.45 an ounce. April gold futures saw a more significant jump, climbing 2.6% to $5,064.19 an ounce. This recovery follows a single-day rally that was the best in over 17 years.

Mideast Tensions Reignite Safe-Haven Demand

The primary driver behind Wednesday's rally is renewed geopolitical risk in the Middle East. Safe-haven demand intensified following overnight reports that the U.S. had shot down an Iranian drone in the Arabian Sea. In a separate incident, Iranian gunboats were reportedly seen approaching a U.S.-linked tanker in the strategic Strait of Hormuz.

These events have largely negated the optimism surrounding planned talks between Tehran and Washington scheduled for Friday. News of the diplomatic discussions had initially eased market concerns and dampened the appeal of gold.

Dollar Strength and Fed Policy Weighed on Prices

The recent sharp decline in gold was largely fueled by speculation about U.S. monetary policy. The market reacted to President Donald Trump's nomination of Kevin Warsh as the next head of the Federal Reserve, with many investors betting he would pursue a less dovish stance than previously anticipated.

This outlook triggered a strong rally in the U.S. dollar, which exerted downward pressure on metals markets. The yellow metal was also vulnerable to profit-taking after climbing to a record high of nearly $5,600 an ounce last week. Despite the recent volatility, gold remains up over 15% for the year in 2026.

Analysts See Long-Term Support from Central Banks

Market analysts believe the fundamental case for gold remains strong. According to a note from ING, the medium-term outlook is supported by three key factors:

• Persistent safe-haven demand

• Ongoing purchases by central banks

• The outlook for real interest rates

"The foundation of gold's multiyear uptrend continues to rest on steady official‑sector accumulation," ING analysts stated, noting that this trend began after Russia's invasion of Ukraine in 2022.

Analysts at OCBC share a similar view, describing the recent price drop as a "price normalization" rather than a "trend reversal." They believe the rebound suggests that forced selling and margin-related liquidations have subsided for now. However, they caution that the recovery remains sensitive to the U.S. dollar, yield repricing, and uncertainty around the Fed's new leadership.

OCBC expects gold to continue drawing support from central bank buying, while ongoing geopolitical and fiscal risks will underpin its role as a safe-haven asset.

Silver and Platinum Join the Precious Metals Rebound

Other precious metals also rallied on Wednesday, extending their recovery. Spot silver posted a significant gain of 8.5%, reaching $90.405 an ounce, while spot platinum rose 3% to $2,274.75 an ounce.

OCBC anticipates that silver will also benefit from its dual identity as both a precious and an industrial metal. The brokerage reiterated its end-of-2026 price targets, forecasting gold at $5,600 an ounce and silver at $133 an ounce.

Poland's central bank has kept its benchmark interest rate steady at 4%, pausing its monetary easing cycle for a second consecutive month as the economy shows signs of unexpectedly strong growth.

The decision by the Monetary Policy Council on Wednesday was anticipated by most analysts, with 19 out of 32 economists surveyed by Bloomberg forecasting the hold. The remainder had predicted a quarter-point rate cut.

Strong Growth Triggers Policy Pause

The central bank is taking a wait-and-see approach after implementing 175 basis points of rate cuts over 2025. The council signaled last month that it needed more time to evaluate the effects of that easing, a stance reinforced by new economic data.

A report last week revealed that Poland's $1 trillion economy expanded by 3.6% in 2025, a figure that surpassed economists' expectations. This robust performance is a key factor behind the decision to hold rates steady rather than risk fueling further economic momentum with another cut.

Inflation Remains Just Below Target

Despite the strong growth, inflation remains contained. The inflation rate stood at 2.4% in December, slightly below the central bank's official target of 2.5%.

This balanced environment—strong growth paired with managed inflation—gives policymakers room to hold their current position. Governor Adam Glapinski has indicated that while there is little room left for additional rate cuts, he does not foresee significant inflation pressure on the horizon following the recent period of tight monetary policy.

Market participants will now look for more detailed guidance. The central bank is scheduled to release a formal statement at 4 p.m. in Warsaw, and Governor Glapinski will hold his monthly press conference at 3 p.m. on Thursday.

FUNDAMENTAL OVERVIEW

GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME

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GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

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GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

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Source: investinglive

U.S. President Donald Trump announced a significant "trade deal" with India on February 2 via a post on Truth Social. According to Trump, the agreement reduces the reciprocal tariff on Indian goods from 25% to 18%, a decision he said was made at the request of Indian Prime Minister Narendra Modi and out of "friendship and respect."

Trump's post included several major claims about India's commitments:

• An agreement to stop buying Russian oil.

• A pledge to purchase "much more" oil from the U.S. and "potentially" Venezuela.

• A promise to eliminate all existing tariff and non-tariff barriers.

• An agreement to buy over $500 billion in American goods across energy, technology, and coal sectors.

Prime Minister Modi confirmed his conversation with his "dear friend" Trump on X. However, his statement was far more limited. Modi only mentioned that "Made in India" products would now face a "reduced tariff" of 18% and expressed support for Trump's global efforts. He made no mention of commitments regarding Russian oil or the elimination of tariffs on U.S. goods.

Officials Scramble to Clarify the Deal

The discrepancy between the two leaders' announcements has created confusion, with officials on both sides suggesting the deal is not yet finalized.

A day after the announcements, India's Commerce Minister Piyush Goyal stated that the final details are still being "worked out" and that a joint statement is expected "shortly" once "technical details" are confirmed.

His American counterpart, U.S. Trade Representative Jamieson Greer, echoed this, noting that the paperwork has yet to be finalized but conceding that the "specifics and details" of the agreement have been defined. Citing government sources, the Asian News International (ANI) agency reported that a joint statement would likely be issued "this week."

Just before Trump's announcement, India's Commerce Secretary Rajesh Agrawal, the former chief negotiator for the bilateral trade agreement, remarked that talks were "progressing well" but that a "larger bilateral trade agreement" is complex and "will take time."

It appears the two nations have agreed on a framework to address the reciprocal tariff issue. While this is being called a trade deal, it stops short of a comprehensive free trade agreement that would resolve all outstanding points of friction.

The Sticking Point: Agriculture and Market Access

A key area of disagreement appears to be market access for U.S. agricultural products.

Goyal reassured the Indian public that the country's sensitive sectors, particularly agriculture and dairy, have been protected. In stark contrast, Greer said India had agreed to reduce tariffs for the U.S. on "a variety" of goods, including agricultural products.

Previously, Greer had described India as a "tough nut to crack" regarding its protected farm sector but noted that the offers made during the latest negotiations were the "best the U.S. has ever received." U.S. Secretary of Agriculture Brooke Rollins also announced on social media that the deal would allow more American farm products to be exported to India. Citing an anonymous government source, Reuters reported that India has agreed to partially open its agriculture sector.

The Russian Oil Connection

Uncertainty also surrounds the status of a 25% punitive tariff announced by the U.S. on August 6 as a penalty for India's continued purchases of Russian oil.

U.S. Ambassador to India, Sergio Gor, confirmed that the total tariff on India will be 18%, which suggests the punitive tariff has been revoked. However, some Indian media outlets, citing White House sources, report that the revocation is conditional on India completely halting all imports of Russian oil, not just reducing them.

Meanwhile, the Kremlin has stated it has not received any information from New Delhi regarding plans to stop buying its oil.

India's Shifting Energy Sources

India has already been diversifying its oil imports. Russia's share of India's oil imports fell to its lowest level in two years in December 2025. According to the Economic Survey 2025–26, U.S. crude accounted for 8.1% of India's oil imports between April and November 2025, up from 4–5% in the same period a year earlier.

Imports from the UAE, Nigeria, Libya, Egypt, Brazil, and Brunei have also increased. While imports from Venezuela dropped during this period, they are expected to rise following Trump's statement.

However, credit rating agency Moody's has warned that an immediate and complete halt of Russian oil imports could disrupt India's economic growth and fuel inflation. It is likely India will continue to reduce its reliance on Russian oil, but a complete stop, as claimed by Trump, presents a significant challenge.

A Major Win for India, But at What Cost?

Securing an 18% reciprocal tariff is a major achievement for New Delhi. This rate is one of the lowest among major Asian economies, trailing only Japan's 15%, and gives Indian exports a significant competitive advantage in the U.S. market.

The central question, however, is what India conceded to get this deal. Until the final details are released, any assessment of the agreement's net benefit to the Indian economy remains premature.

The timing of the announcement, just days after an India-EU Free Trade Agreement was unveiled, is telling. The pact with the EU was seen as a signal to the U.S. that its partners would not bow to threats of tariff wars. This new development indicates Washington has become more willing to accommodate India's demands, even as negotiations on contentious issues continue.

Once the fine print is public, it will be clear whether the U.S. accommodated India's sensitivities on market access, particularly in agriculture. For now, the announcement has likely paused the recent downward trend in bilateral relations and created space to rebuild trust.