Gold Surges to Record Levels as Fed‑Trump Clash and Iran Unrest Drive Safe‑Haven Demand

President Donald Trump is considering a partnership with Elon Musk's SpaceX to counter Iran's ongoing internet shutdown.

U.S. President Donald Trump announced on Sunday that he intends to speak with billionaire Elon Musk about using his satellite technology to restore internet access in Iran, where a government-imposed blackout has stifled communication for four days amid widespread protests.

"He's very good at that kind of thing, he's got a very good company," Trump told reporters when asked about engaging Musk's company, SpaceX. The firm's Starlink satellite internet service has previously been used to bypass government restrictions in Iran.

As of the announcement, neither Musk nor SpaceX had commented on the potential collaboration.

A Complex Relationship: Trump and Musk Reconnect

The potential partnership comes as Trump and Musk appear to be rekindling a complex relationship. After initially helping fund Trump's winning presidential campaign and later orchestrating major cuts to the federal government, the two had a public falling-out last year when Musk opposed Trump's signature tax bill.

Recent events suggest a thaw in their relations. Trump and Musk were seen dining together at the Mar-a-Lago resort this month, and Secretary of Defense Pete Hegseth is scheduled to visit a SpaceX facility in Texas on Monday.

Starlink's Role in Global Conflicts

Using Starlink to provide internet to Iranians is not a new concept. Musk has previously supported the idea to help citizens circumvent government censorship, including during major protests in 2022. That year, following the death of 22-year-old Mahsa Amini in police custody, the Biden White House engaged with Musk to facilitate the use of Starlink in Iran.

The satellite service has also played a crucial role in other geopolitical hotspots, most notably Ukraine. However, its deployment is not without controversy. In 2022, Musk reportedly ordered a shutdown of Starlink service during a critical Ukrainian military offensive.

Unrest and Information Control in Iran

The current wave of anti-government protests in Iran, described as the most significant since 2022, began on December 28. Initially sparked by soaring prices, the demonstrations quickly escalated into a direct challenge against the clerical rulers who have governed the country since the 1979 Islamic Revolution.

The government's response has included a near-total internet blackout, severely hampering the flow of information. Human rights groups estimate hundreds have been killed in the crackdown. The U.S.-based organization HRANA has reported specific figures from the two weeks of unrest, including:

• 490 protesters killed

• 48 security personnel killed

• Over 10,600 people arrested

The Iranian government has not released an official death toll, and Reuters was unable to independently verify these numbers.

Fed Independence Challenged as Political Interference Intensifies

Investor Reactions: Not Panic, But Deep Concern

Market Signals Reflect Defensive Positioning

Source: Reuters

President Donald Trump has declared that credit card companies will be "in violation of the law" if they fail to cap their interest rates at 10% for one year.

Speaking to reporters on Air Force One, Trump reiterated his demand, setting a January 20 deadline for lenders to comply. He sharply criticized existing rates, which he claimed are punishing consumers unfairly.

"Some of them are charging 28, almost 30%," Trump stated. "People don't know they're paying 30%. They're working and have no idea they're paying 30%." He concluded that major lenders have "really abused the credit cards."

The Legal Mystery Behind Trump's Threat

Despite the strong warning, Trump did not cite any specific legislation or provide a legal basis for how lenders would be breaking the law by maintaining their current rates. The demand appears to be a presidential directive without explicit statutory backing.

The issue of high credit card interest rates, often exceeding 20% in recent years, has previously drawn attention from lawmakers. However, legislative efforts to impose caps have consistently faced strong resistance from the financial industry.

Industry Warns Rate Cap Could Hurt Consumers

In response to the president's call, major banking trade groups, including the Bank Policy Institute and the Consumer Bankers Association, adopted a measured tone. While acknowledging the president's goal, they pushed back on the proposed solution.

"We share the president's goal of helping Americans access more affordable credit," the groups said in a joint statement.

However, they argued that the evidence shows a 10% interest rate cap would backfire. The groups warned such a move "would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards."

The industry's long-standing position is that slashing rates would make lending to higher-risk borrowers unprofitable, potentially cutting off their access to credit and leaving them with options like payday loans and pawn shops.

The United States is set to host a meeting of G-7 ministers this week to address a critical economic vulnerability: the global dependence on China for rare earths. The summit highlights a coordinated push among allied nations to develop alternative supply chains for minerals essential to modern technology and military hardware.

Canadian Finance Minister Francois-Philippe Champagne will meet with his G-7 counterparts in Washington on Sunday and Monday. According to a statement from Ottawa, Treasury Secretary Scott Bessent will host the talks, which are focused on securing global supply chains for critical minerals.

The discussions will expand beyond the G-7 to include officials from Australia, South Korea, India, Mexico, and the European Union, signaling a broad-based effort to address the security of strategic raw materials.

China's Export Squeeze Sparks International Alarm

The meeting comes as tensions escalate over China's new export restrictions, which have raised concerns in Japan and beyond. These measures were reportedly implemented after a dispute concerning comments made by Prime Minister Sanae Takaichi about Taiwan.

Japanese Finance Minister Satsuki Katayama confirmed she would use her trip to the U.S. to discuss the issue with her counterparts from other major industrial economies.

According to a report from Nikkei Asia citing sources familiar with the trade, China’s restrictions on rare earth shipments to Japan now also cover products intended for civilian use. The report noted that Chinese officials are either denying export permits or subjecting applications to unusually long reviews.

China's Foreign Ministry has not yet responded to requests for comment on the Washington meeting or the Nikkei report.

Beijing's Counter-Narrative

While official channels remain quiet, a different perspective has emerged from state-affiliated media. Lu Yaodong, deputy director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences, told the Global Times that Japan’s claims of China "weaponizing" rare earths are misleading. Lu asserted that Beijing’s actions are a direct response to Japan's "remilitarization."

The Long Game: Breaking Dependency on Chinese Minerals

This is not the first time rare earths have become a focal point of geopolitical tension. China, the world's leading supplier, previously restricted exports to counter tariffs imposed by the Trump administration.

Although President Donald Trump and Chinese leader Xi Jinping agreed to a trade truce in October that included lifting those restrictions, Washington has continued to develop policies aimed at reducing its reliance on Chinese rare earth magnets. These components are vital for a range of consumer goods, from automobiles to electronics.

Last week, White House trade adviser Peter Navarro expressed confidence that American industrial innovation would eventually boost domestic production and break China's market dominance.

The effort is not limited to the U.S. Germany has also signaled its intent to play a key role. Before leaving for the meeting, Vice Chancellor and Finance Minister Lars Klingbeil stated that Germany is open to taking "joint action" with international partners to strengthen supply chains and guarantee access to critical manufacturing materials.

Former U.S. President Donald Trump has declared his intention for the United States to acquire Greenland, dismissing concerns that such a move could disrupt the NATO alliance.

Speaking to reporters aboard Air Force One on Sunday, Trump framed the potential acquisition as a strategic necessity to block geopolitical rivals. "If we don't take Greenland, Russia or China will. And I'm not letting that happen," he stated, adding, "one way or another, we're going to have Greenland."

Trump also suggested that Greenland should be the one to propose a deal to Washington for a takeover.

Dismissing Concerns Over NATO Stability

When questioned about potential opposition from NATO allies, Trump was dismissive, asserting the alliance's dependence on the United States. He claimed the treaty would not exist without his presidency.

"If it affects NATO, then it affects NATO," Trump said. "But, you know, they need us much more than we need them. I will tell you that right now."

In recent weeks, Trump had intensified his calls for a U.S. takeover, arguing that possessing the island was crucial for strengthening American security against both Russia and China.

Strategic Context and European Reaction

Concerns over U.S. intentions have reportedly grown, particularly after a U.S. incursion into Venezuela that led to the capture of President Nicolas Maduro.

The United States already maintains a military footprint in Greenland, but Trump has advocated for expanding this presence. The island, a self-governing territory within the Kingdom of Denmark, is home to nearly 60,000 people.

Reports last week indicated that Trump and White House officials were exploring several methods to gain control of the island, including:

• Potential military action.

• Lump-sum payments to Greenland's residents to persuade them to secede from Denmark.

Leaders in Denmark and across Europe have widely rejected Trump's demands.

South Korea's central bank is widely anticipated to hold its key interest rate steady this week as it balances pressures from a weakening currency and an unsettled real estate market.

Bank of Korea Governor Rhee Chang-yong presides over a Monetary Policy Committee meeting in Seoul.

An overwhelming consensus among economists points to the Bank of Korea (BOK) leaving its benchmark rate unchanged at 2.5% during its policy meeting on Thursday. A survey by Yonhap Infomax found that all 25 analysts polled expect a rate hold. A separate poll by Yonhap News Agency of six additional experts revealed the same unanimous expectation.

If confirmed, this would mark the fourth consecutive meeting where the BOK's Monetary Policy Board has kept the rate steady, despite having initiated an easing cycle in October 2024.

Financial Stability Concerns Outweigh Easing

Analysts argue that the current economic environment is not conducive to rate cuts, citing persistent threats to financial stability.

"Factors undermining financial stability persist, including the weak won and overheated sentiment in the property market," noted Yoon Yeo-sam, an analyst at Meritz Securities.

The key considerations for policymakers include:

• Economic Growth: The economy is projected to expand above the 2% range this year.

• Inflation: Price growth is running at a manageable low-to-mid 2% range.

• Currency Weakness: The Korean won continues to hover near the critical 1,450 per dollar mark.

Yoon added that these conditions make the environment "unfavorable for rate cuts."

Persistent Pressure on the Korean Won

The depreciation of the won remains a primary focus for authorities. Despite various measures to support the currency, it has struggled to gain ground against the dollar.

On Monday, the won opened at 1,461.3 per dollar, representing a decline of 3.7 won from the previous session and underscoring the ongoing pressure that complicates the BOK's monetary policy decisions.