Why Germany's Dirtiest Coal Plants Are Profitable Again

Range-Bound Crude Eyes Upside Breakout on Geopolitical Tensions

Patience Required in This News-Driven Market

Supply Concerns Battle Geopolitical Risk Premium

Key Inventory Data on the Horizon

Technical Outlook: Caught Between Key Moving Averages

Daily March Crude Oil Futures

The Bottom Line: Bullish Bias Amid Dual Triggers

Source: fxempire

JPMorgan Chase CEO Jamie Dimon delivered a stark warning from the World Economic Forum in Davos, labeling a proposed 10% cap on credit card interest rates an "economic disaster." While acknowledging his bank would survive the policy, Dimon argued it would devastate American consumers and businesses.

Rate Cap Would Choke Consumer Credit

The core of Dimon's argument is that the cap would effectively cut off a critical financial lifeline for the majority of the population. "It would remove credit from 80% of Americans, and that is their back-up credit," the head of the largest U.S. bank stated.

Credit cards are a key source of revenue for banks, which use high interest rates to offset the risk associated with unsecured loans. A government-mandated cap would fundamentally alter this business model.

A Ripple Effect on the Broader Economy

According to Dimon, the real victims of such a policy wouldn't be financial institutions. He warned that the impact would cascade through the entire economy, hurting everyday businesses that rely on consumer spending.

"People crying the most will not be the credit card companies; it will be the restaurants, retailers, travel companies, the schools, the municipalities," he explained. Dimon painted a picture where consumers struggle with essential payments, stating, "People will miss their water payments, this payment and that payment."

As a challenge, he suggested lawmakers first test the policy's viability in smaller markets like Vermont and Massachusetts.

Wall Street Skeptical of Political Feasibility

The proposal for a rate cap was floated by U.S. President Donald Trump on social media, catching the industry by surprise and causing bank stocks to fall. The move is widely seen as an attempt to address voter concerns about the cost of living ahead of congressional elections.

However, industry leaders and analysts are skeptical the plan could become law. Banking organizations have pushed back strongly, and Wall Street analysts note that implementing such a cap would require new legislation with a low probability of passing.

Citigroup CEO Jane Fraser, also speaking from Davos, echoed this sentiment. While agreeing with the president's focus on affordability, she stated, "Capping rates would not be good for the U.S. economy." Fraser told CNBC she does not expect Congress to approve the measure.

In response to a potential cap, analysts believe card issuers might introduce alternative products, such as:

• No-frills cards with a 10% rate but no rewards.

• Lower credit limits for customers.

• Specialized lower rates for certain consumer segments.

Venezuela's leading business association has endorsed the interim government's new economic measures, including a critical injection of foreign currency from oil revenues. The group, Fedecamaras, believes the move will help stabilize the country's volatile exchange rate and rein in rampant price increases.

The announcement comes as Venezuelans continue to navigate a severe economic crisis defined by shortages, triple-digit inflation, and the collapse of the local bolivar currency. The monthly minimum wage is now equivalent to just $0.37, and while public sector workers can earn around $120 with bonuses, analysts estimate a family's basic monthly needs cost approximately $500. Even private sector employees with higher salaries are often paid in bolivars in an economy that has become overwhelmingly dollarized.

Currency Stabilization at the Forefront

Felipe Capozzolo, president of Fedecamaras, stated that the private sector supports the government's efforts to bring order to the currency market. "We welcome steps aimed at regularizing and stabilizing the exchange system," he said, noting that the gap between official and unofficial exchange rates directly fuels price instability.

"Businesspeople are the first to want price stability in Venezuela," Capozzolo added. "We will support any measure taken by the government aimed at stabilizing the economy."

The supply of U.S. dollars, essential for businesses to import materials, tightened significantly at the end of 2025. This occurred after the U.S. seized Venezuelan oil tankers, disrupting the nation's primary source of revenue and stoking inflation.

New Oil Revenues Offer a Glimmer of Hope

The new strategy is backed by fresh funds. On Tuesday, acting president Delcy Rodriguez confirmed that the country had received $300 million from recent oil sales. These are the first proceeds from a 50-million-barrel supply agreement announced by U.S. President Donald Trump, which followed the capture of former president Nicolas Maduro earlier this month.

While significant hurdles such as inflation, tax pressures, and financing restrictions persist, Capozzolo noted that economic expectations are beginning to shift. Renewed activity in the oil sector and the potential for increased investment are fueling cautious optimism.

"A different perception is beginning to take shape about what our economic performance might be," he said.

Economic Data Paints a Mixed Picture

The government reported that the economy grew by 9% in 2025, although it has not released official inflation figures. In contrast, local analyst firms estimate a far more modest economic expansion of around 3% for last year, with consumer price inflation exceeding 400%.

For the average citizen, the hope is that rising oil exports can translate into a stronger economy and better wages.

"Venezuelans want to earn a decent income. Our wages are worthless, on the floor," said Moises Figueredo, a 56-year-old security guard shopping in Caracas. "We need investors to come, because there are no good jobs. I hope things improve."

That sentiment was echoed by others. "I worked at a ministry but left because the situation was tough; my salary wasn't enough even for transport," said Celis Chirinos, a 44-year-old fruit vendor. "What we want is to work, to see things improve."

An escalating dispute between the United States and Europe over Greenland is raising the risk of sanctions that could directly impact EU holders of U.S. Treasury bonds, according to an analyst at Commerzbank AG.

While no sanctions have been threatened and officials hope for a compromise, the fact that analysts are now discussing such scenarios highlights how deteriorating trans-Atlantic relations are creating new tail risks for the market.

The Financial Risk of Political Fallout

According to Michael Pfister, a currency analyst at the German bank, the consequences of such a move could be severe.

"If Trump allows the conflict to escalate further, it will become increasingly risky for affected countries to hold US government bonds, as investors risk being unable to sell these investments," Pfister explained. "But if they sell these holdings, the US dollar will also suffer."

The conflict over Greenland, a semi-autonomous territory of Denmark, intensified after President Donald Trump threatened to impose new tariffs on goods from eight European countries.

Such a step would represent a sharp and unexpected escalation in America's economic foreign policy. U.S. sanctions programs, administered by the Office of Foreign Assets Control, are typically broad and reserved for nations like North Korea and Iran. These financial sanctions can involve freezing assets, cutting entities out of the U.S. financial system, and prohibiting trade.

Why Sanctioning an EU Ally Changes Everything

Pfister noted that past U.S. sanctions have not shaken European confidence in dollar-denominated assets. However, a move against a European Union member could be a different story.

"My old boss always told an interesting anecdote about the status of the US dollar as the world's reserve currency: when sanctions were imposed on Iran, a move that the Europeans did not support, the conflict was not great enough to prompt a departure," he said. "But what about sanctions against an EU country?"

Pfister's analysis depends on a further escalation of tensions, which remains a possibility for investors. Greenland's prime minister stated Tuesday that the Arctic island, while considering it unlikely, needs to prepare for a potential military invasion.

Market Signals and "Weaponized" Assets

The idea of Europe "weaponizing" its holdings of U.S. assets—a concept previously flagged in a note by Deutsche Bank AG—is gaining traction among market analysts.

In a tangible move, the Danish pension fund AkademikerPension announced on Tuesday that it would sell its approximately $100 million in U.S. Treasuries by the end of the month.

Pfister clarified that this doesn't signal an immediate crisis for the dollar. "I am not suggesting that a shift away from the US dollar is imminent, nor that the decision by the Danish pension fund could trigger a chain reaction," he said.

Instead, the move serves as a clear warning. "The market's reaction to such announcements could possibly make the US government aware of the high costs of a Greenland takeover," he concluded.

Gold prices pushed past $4,872 an ounce Wednesday morning, while silver neared the triple-digit mark at $94.91, as investors increasingly seek shelter in hard assets. The rally is being driven by a combination of escalating geopolitical turmoil, persistent trade-war tensions, and growing concerns over the stability of the global fiat monetary system.

With these pressures mounting, market analysts expect the upward trend for precious metals to continue. While gold continues its steady climb, silver appears to be consolidating after a significant rally last week.

Key Drivers Fueling the Metals Rally

Investors are treating gold and silver less like short-term trades and more as crucial barometers of global anxiety. The demand for these safe-haven assets is underpinned by several key factors:

• Geopolitical Instability: The risk of conflict involving Iran and Venezuela keeps markets on edge.

• Trade Disputes: U.S. tariff threats aimed at Greenland and Europe are fueling economic uncertainty.

• Monetary Policy Concerns: President Trump's critiques of the Federal Reserve's independence have added another layer of doubt for investors.

• Central Bank Behavior: A steady shift by central banks away from the U.S. dollar, coupled with expectations of monetary easing, is bolstering gold's appeal.

These elements combine to reinforce the role of precious metals as a hedge against global risk, pushing capital away from traditional currency-based assets.

Silver's Volatility: The "Devil's Metal" Shines

Silver's recent price action has been characteristically dramatic. According to Bloomberg's lead commodity analyst, Mike McGlone, the metal's explosive run is typical of its reputation for being unruly and prone to extreme moves.

A daily candlestick chart from TradingView shows silver's strong uptrend from August 2025 to January 2026, with the price closing near $94.91.

In McGlone's view, the rapid surge has effectively cooled its own supply squeeze. He points to a near-historic breakdown in the gold-to-silver ratio as evidence that the market may have moved too far, too fast, reaffirming silver's nickname as the "devil's metal."

Gold's Outlook: Analyst Forecasts Point Higher

While silver's rally has been volatile, gold’s ascent is supported by a strong institutional outlook. A recent report from the London Bullion Market Association (LBMA) suggests gold could "average 38% above last year's levels."

A daily candlestick chart shows gold's price rising steadily from around $3,400 in August 2025 to over $4,872 by January 2026.

The LBMA's annual Precious Metals Analyst Survey highlights the impact of U.S. central bank easing and global de-dollarization efforts. The survey revealed a wide range of forecasts for gold, from a bearish call of $3,450 an ounce to a highly bullish target of $7,150. The consensus is clear: "Geopolitical tension continues to cement gold's role as the world's premier safe haven."

Even after reaching record levels, both gold and silver are still viewed as solid investments for 2026, as the underlying global uncertainties show no signs of abating.

Why are gold and silver prices at record levels in 2026?

A mix of geopolitical risk, ongoing trade disputes, and expectations of central bank easing has weakened confidence in fiat currencies, pushing investors toward the safety of hard assets like gold and silver.

What is driving silver's move toward $100?

A surge in investment demand, amplified by a sharp move in the gold-to-silver ratio, has propelled silver higher. However, analysts note that a short-term pause or consolidation is possible after such a rapid advance.

What is the analyst forecast for gold?

The London Bullion Market Association (LBMA) has presented a wide forecast range, with a low estimate of $3,450 per ounce and a high-end target of $7,150, reflecting significant market uncertainty.

Why are investors choosing precious metals over fiat?

Persistent geopolitical tensions, unresolved tariff threats, and questions surrounding the independence of central banks are reinforcing the traditional role of gold and silver as essential safe-haven assets in times of instability.

As India prepares for its Union Budget on February 1, its economic strategy for the coming year will be heavily influenced by developments in the world's two largest economies: the United States and China. Both present a complex and challenging picture for global stability and trade.

US Growth: A Fragile AI-Powered Boom

The U.S. economy appeared strong at the end of 2025, posting a robust 4.3 percent growth in the third quarter driven by consumer spending. However, a closer look reveals significant imbalances that question the sustainability of this momentum.

Investment growth is almost entirely concentrated in the expansion of AI capacity. This narrow focus is accompanied by several warning signs: corporate hiring has nearly stopped, AI-related stocks show unsustainably high price-to-earnings multiples, and the final consumer demand for AI-driven products remains uncertain. Furthermore, building out AI infrastructure is highly energy-intensive, a growing concern as this expansion moves into developing nations.

Consumption growth itself is on shaky ground. It is heavily skewed toward upper-income households and is expected to slow. Future trends will largely depend on how President Donald Trump's proposed tax cuts are financed.

The Double-Edged Sword of Tariffs

One proposed funding mechanism is revenue from tariffs, which saw a dramatic increase in 2025. In May 2025, tariff revenues were four times higher than the previous year and 25 percent higher than the preceding month, even without significant changes in import prices.

However, this strategy carries significant risks. The sharp rise in average tariffs, from around 2 percent to nearly 10 percent, is set to fuel domestic inflation and suppress consumer demand, which will ultimately erode tariff revenues.

At the same time, tax cuts will add to the national debt, pushing it toward an unsustainable level and driving up interest rates. This combination is likely to trigger a contraction in both consumption and investment, casting serious doubt on whether the late-2025 growth spurt can be maintained.

China's Slowdown Weighs on Global Demand

The outlook from China is even more concerning for the global economy. The country's growth has been in a long-term decline, falling from 8-10 percent in the decades after 1980 to around 5 percent in 2024-25 and is now trending even lower.

Two major factors are depressing domestic demand: the ongoing real estate crisis and an aging population that constrains consumption.

Export Surge Masks Deeper Weakness

Even China's recent surge in exports offers little comfort. Much of this growth stems from two temporary phenomena:

• Trade Diversion: Exports are being rerouted from the U.S. to developing countries, many of which are now erecting their own tariff and non-tariff barriers in response.

• Tariff Arbitrage: Chinese goods are reaching the U.S. market indirectly through partners like Mexico and Vietnam to circumvent tariffs.

This arbitrage channel is already closing. The U.S. is expected to block these routes, and Mexico has already imposed tariffs of up to 35 percent on countries without free trade agreements, with a 50 percent tariff on automobiles and auto parts.

Navigating a Tough Trade Environment: India's Strategy

For India, the global trade landscape in 2026 looks challenging. The recent spike in commodity trade was largely driven by businesses making pre-emptive purchases before the Trump tariff regime took effect. With that over, opportunities appear limited, with the notable exception of services trade, which remains resilient due to its links with the U.S. economy.

Still, India has options. Trade diversion away from the U.S. could create new openings with partners like the EU and the U.K. New trade agreements could revive India's textile and leather exports, which were hit hard by 50 percent U.S. tariffs. During a recent visit, German Chancellor Friedrich Merz suggested an India-EU Free Trade Agreement could be finalized by February.

Certain sectors, such as petroleum products and pharmaceuticals, are expected to maintain sales even in the U.S. market. However, the strongest momentum will likely be in services, a key focus in most ongoing FTA negotiations.

The best-case scenario for India would be the removal of prohibitive U.S. tariffs. This would position the country as the preferred "new China" for foreign direct investment from the U.S. and Europe. India's high growth rates and favorable demographics are powerful long-term assets, and technology transfer via FDI remains a critical goal. The primary challenge is that unfavorable U.S. tariffs deter not only American investors but also those from the 38-member OECD bloc.

The Core Challenge: Reviving Global Consumption

Ultimately, the central issue plaguing the global economy is the need to rejuvenate demand. Here, China is a key factor. With foreign reserves exceeding $3.2 trillion, it has become a "global saver," creating excess savings worldwide.

To boost global demand, China must transition from a saver to a global buyer. This, however, presents a major political challenge for President Xi Jinping. The country's powerful exporter lobby benefits from the current model and is most likely to resist any change to the status quo.

The critical question for 2026 is whether this dynamic can shift. Both the United States and China continue to act as bulls in the china shop of the global economy.