Coinbase Revolt Puts Landmark US Crypto Bill on Ice

Source: cnbc

Gold prices declined on Thursday as investors' appetite for riskier assets grew, driven by signs of easing trade tensions from the United States. The safe-haven metal also faced pressure from traders taking profits after its recent rally.

By 8:57 a.m. ET, spot gold had slipped 0.4% to $4,819.39 per ounce, after falling by nearly 1% earlier in the session. U.S. gold futures for February delivery lost 0.3%, trading at $4,821 per ounce.

Geopolitical Thaw Lifts Market Sentiment

Market sentiment improved significantly after U.S. President Donald Trump backed off from threats of Greenland-related tariffs. This renewed optimism fueled buying appetite for equities, with U.S. stock index futures climbing on Thursday.

Adding to the positive tone, Trump launched his Board of Peace, an initiative initially designed for Gaza's ceasefire that he envisions playing a wider role. He also commented that peace efforts in Ukraine were "getting close" ahead of a scheduled meeting with President Volodymyr Zelenskiy in Davos.

Expert Analysis: Risk-On Mood Curbs Gold's Appeal

Bart Melek, global head of commodity strategy at TD Securities, attributed the sell-off to a clear shift in investor behavior.

"We have seen significant resurgence in risk appetite that essentially prompted the market to be a little less cautious of risk assets," Melek explained. This shift, he noted, "resulted in less appetite for gold and some profit-taking."

Federal Reserve Policy and Inflation Data in Focus

Investors are also closely monitoring the U.S. Federal Reserve, which is widely expected to hold interest rates steady at its next policy meeting.

The central bank's independence was a topic of discussion as U.S. Supreme Court justices heard arguments over President Trump's attempt to fire Federal Reserve Governor Lisa Cook. The court appeared to support the idea that the Fed's authority to set monetary policy must be preserved.

Looking ahead, traders are awaiting the November Personal Consumption Expenditures (PCE) data, a key inflation indicator that could offer clues about the Fed's future policy path.

How Other Precious Metals Performed

While gold prices fell, performance across other precious metals was mixed.

• Silver: Spot silver was up 0.2% at $93.47 an ounce after hitting a record high of $95.87 on Tuesday. Melek commented that silver's rally might be "a little overdone" and could face a correction as global liquidity increases.

• Platinum: Spot platinum rose 1.5% to $2,520.45 per ounce, a day after touching a record peak of $2,511.80.

• Palladium: Palladium also gained, rising 1.1% to $1,860.25.

President Donald Trump’s recent statements at Davos seemed to de-escalate a brewing transatlantic crisis. He announced the US would not use military force over Greenland and would pause new tariffs on some European countries—for now. But while the immediate threat has subsided, the episode has shattered a core illusion about the US-EU alliance.

The confrontation may have cooled, but the underlying power dynamics have been permanently altered. Trump’s approach framed Greenland as a strategic necessity for the US, treating European resistance as a problem to be managed rather than a partnership to be respected.

For the European Union, the critical takeaway is not that this specific crisis was averted. The real issue is that economic coercion has been normalized as a legitimate tool within the transatlantic relationship. The question is no longer if another escalation will occur, but how the EU will respond when it does.

A New Era of Coercion in the Alliance

American strategic interest in Greenland, valued for its missile defense and Arctic access, is nothing new. What shocked European capitals was President Trump's readiness to use tariffs and market access as leverage to force compliance from an EU member state over its own territory.

Though the threats were suspended, the signal was sent. From the EU's perspective, this behavior is precisely what it has sought to deter from other global actors. The bloc's Anti-Coercion Instrument (ACI), which came into force in December 2023, was designed for situations where economic pressure is applied to force political change. The fact that its first major test could involve the United States is a stark geopolitical reality check.

When a core ally treats sovereign territory as negotiable under economic pressure, the line between alliance management and coercive bargaining becomes dangerously thin.

Wake-Up Call: EU Confronts Its Strategic Vulnerabilities

The Greenland incident has served as a powerful catalyst, accelerating the EU's push for "strategic autonomy." For years, this concept was a slow-moving, often divisive debate, sometimes dismissed as a pet project of the French geopolitical agenda. Now, it is an urgent necessity.

The episode made it undeniably clear that the EU remains structurally exposed to pressure from its closest ally. Trump's gambit demonstrated that Washington can apply, adjust, and withdraw economic leverage at will, forcing the EU to react rather than set its own course. The absence of a military threat offers little comfort; it simply highlights that the most effective pressure can be applied below the threshold of armed conflict, where Europe is least prepared.

The LNG Trap: From Solidarity to Dependence

Nowhere is this vulnerability clearer than in the energy sector. In 2025, the United States accounted for nearly 60% of the EU's Liquefied Natural Gas (LNG) imports. Following Russia's invasion of Ukraine, this was celebrated as transatlantic energy solidarity.

Viewed through a strategic lens today, it looks more like a new asymmetric dependence. In a friendly relationship, this interdependence is manageable. In a strained one, it becomes a critical liability, paving the way for future political weakness.

This is why the EU is fast-tracking its strategic autonomy—not necessarily to distance itself from the US, but because deep integration without the ability to counteract pressure leaves the bloc exposed to an unpredictable administration.

European Leaders Signal a Shift in Strategy

The shift in attitude was palpable at Davos, where European leaders were unusually direct.

Speaking just a day before Trump, French President Emmanuel Macron argued that Europe must become "stronger and more autonomous" to remain credible, even while emphasizing cooperation with Washington. He warned that the EU could no longer afford to be naïve about power in a world increasingly shaped by "bullies" and coercion.

Belgian Prime Minister Bart De Wever was even more blunt. He warned that Europe could become the "slave" of the US president if it fails to urgently develop its "own technological platforms to build tomorrow's prosperity." His comments underscore a core structural fear: an EU reliant on systems it does not control is an EU permanently at risk.

The EU's Secret Weapon: The Anti-Coercion Instrument

However, the EU is far from powerless. Its Anti-Coercion Instrument (ACI) gives Brussels a formidable tool to retaliate against economic pressure. The ACI allows the EU to deploy targeted countermeasures in sectors like services, public procurement, and investment—areas where US companies are deeply exposed to the vast EU single market.

This is a critical piece of leverage. US firms hold the largest stock of foreign direct investment in the EU, especially in high-value services. By targeting specific firms and constituencies, the EU can impose concentrated political costs on Washington, a powerful deterrent less than a year before the US midterm elections.

Trump's decision to back down may, in fact, highlight the deterrent power of the ACI. The simple belief among markets and policymakers that the EU is willing to use this "economic nuclear weapon" creates a powerful precedent. As former Italian Prime Minister Enrico Letta noted, the single market is "much more than a market." The Greenland affair may have been the moment the EU finally realized it.

Source: reuters

US Commerce Secretary Howard Lutnick has sharply criticized Canada's recent efforts to forge closer trade ties with China, labeling the move "political noise" and warning it could jeopardize upcoming talks to renew the North American trade agreement.

Speaking at the World Economic Forum in Davos, Lutnick questioned the logic behind Canadian Prime Minister Mark Carney's strategy.

"Do you think China is going to open their economy to accept exports from Canada? This is the silliest thing I've ever seen," Lutnick stated in a Bloomberg TV interview.

US Dismisses Canada's China Pivot

Lutnick's comments follow a deal last week between Prime Minister Carney and Chinese President Xi Jinping. The agreement aims to facilitate Chinese investment in Canada's electric vehicle and auto sectors, with China expected to reduce tariffs on Canadian canola in return.

Following the deal, Carney described China as a "more predictable" trading partner than the United States.

Lutnick dismissed this sentiment, arguing that the economic reality of the U.S.-Canada relationship is irreplaceable.

"We should look at it as just political noise coming out of a prime minister," he said. "I don't think it can be real, because he took out the math of Canada's economy and doing business with the United States of America's $30 trillion economy. There's no such thing as changing what they have today."

Lutnick emphasized that Canada currently has "the second-best deal in the world" through its access to the U.S. market, second only to Mexico.

USMCA Renegotiation at Risk

The Commerce Secretary directly linked Canada's actions to the future of the U.S.-Mexico-Canada Agreement (USMCA), suggesting that Ottawa's new alignment with Beijing could become a major issue during its review.

He questioned whether the White House would allow Canada to maintain its favorable trade status if it proceeds with plans like importing Chinese electric vehicles.

"Do you think the president of the United States is going to say you should keep having the second-best deal in the world?" Lutnick asked, referencing the upcoming USMCA talks.

He projected that the renegotiation process for the trade accord is likely to begin "towards the end of the summer and the middle of the summer" this year.

U.S. President Donald Trump delivered a direct message to Russian leader Vladimir Putin following a meeting with Ukrainian President Volodymyr Zelenskiy in Davos on Thursday, declaring that the war in Ukraine must stop. The statement came after what Trump described as "good" talks with Zelenskiy, signaling a new phase in a high-stakes diplomatic push to resolve the conflict.

Figure 1: U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy meet in Davos amid a high-stakes diplomatic effort to end the war with Russia.

For weeks, U.S. and Ukrainian officials have engaged in intense shuttle diplomacy. The Trump administration is pressuring Kyiv to secure a peace agreement for the nearly four-year-old war, even as Moscow shows few signs of de-escalating its military campaign.

After his hour-long discussion with Zelenskiy, Trump confirmed the meeting was productive but offered few specifics. "I think the meeting with President Zelenskiy was good. It's an ongoing process," he told reporters, adding that U.S. envoys were departing for Moscow for further negotiations. When asked about his message for Putin, Trump was blunt: "The war has to end."

A High-Stakes Diplomatic Push

The Davos meeting marks one of roughly half a dozen face-to-face encounters between the two leaders since Trump returned to office and pivoted U.S. policy toward direct diplomacy with Russia.

Earlier in the week, Zelenskiy had set conditions for his trip, stating he would only attend if he could finalize agreements with Trump on U.S. security guarantees and post-war reconstruction funding. However, there was no immediate indication of a major breakthrough.

Meanwhile, U.S. envoy for Ukraine Steve Witkoff expressed optimism. "If both sides want to solve this, we're going to get it solved," he said at the World Economic Forum. "I think we've made a lot of progress."

Zelenskiy is currently grappling with a severe energy crisis at home, as Russian airstrikes have left parts of Kyiv and other regions without power and heat. He was scheduled to deliver a speech following his discussion with Trump.

Next Stop: Moscow and Abu Dhabi

The diplomatic offensive is set to continue in Moscow. Witkoff and fellow U.S. envoy Jared Kushner are scheduled to meet with Putin later on Thursday to discuss a potential peace plan for Europe's deadliest conflict since World War Two.

Following the talks in Russia, Witkoff announced that negotiators would travel to Abu Dhabi for "military-to-military talks and discussion of the prosperity package."

Russia has so far remained cool to the U.S.-led initiative, insisting that Kyiv must cede parts of its eastern Donetsk region, an area Moscow has failed to conquer despite advances on the battlefield. Putin confirmed late Wednesday that he would discuss a settlement, the potential use of frozen Russian assets for reconstruction, and Trump’s proposal for a global "Board of Peace." Critics have argued such a body could undermine the United Nations.

The Kremlin confirmed the meeting with Witkoff and Kushner would take place after 7 p.m. Moscow time.

Markets React While Attacks Continue

The flurry of high-level meetings has sparked hope in financial markets. Ukraine's international bonds rallied more than 2 cents on Thursday as investors grew optimistic that progress could be made toward ending the war.

Despite the diplomatic activity, the conflict on the ground rages on. Russian airstrikes hit several parts of Ukraine on Thursday.

• In the southern Odesa region, a 17-year-old was killed after a drone struck an apartment building.

• In the central city of Kryvyi Rih, a ballistic missile hit a residential building, wounding eleven people.

• In Kyiv, nearly 3,000 high-rise buildings remained without heat following recent Russian attacks.