China’s Central Bank Extends Gold Buying Streak Despite Market Volatility

China’s central bank extended its gold purchases for a 15th consecutive month in January 2026, underscoring its continued diversification strategy amid global uncertainty. The People’s Bank of China (PBOC) reported that its gold holdings rose to 74.19 million troy ounces at the end of January, up slightly from 74.15 million ounces in December. The value of China’s gold reserves surged to US$369.58 billion from US$319.45 billion a month earlier, largely reflecting sharp price movements. Gold prices had surged to near-record highs of almost US$5,600 per ounce in January amid heavy speculative buying, before plunging sharply following the nomination of Kevin Warsh as the next U.S. Federal Reserve chair. Gold briefly fell to as low as US$4,403 per ounce in early February and is now trading around US$4,960. While official reserves continue to grow, domestic gold consumption in China declined for a second straight year in 2025, falling 3.75% to 950 metric tons, according to the China Gold Association. This drop was driven by weaker jewelry demand, even as investment demand strengthened significantly. Purchases of gold bars and coins—often seen as a safe-haven asset—jumped 35.14% in 2025, accounting for more than half of total gold consumption. The data highlight a clear divergence between consumer demand and investment-driven buying, as households and institutions seek protection against economic and financial risks despite heightened price volatility.

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India–U.S. Move Closer to Phase-One Bilateral Trade Agreement

India and the United States are set to finalize and sign a joint statement for the first phase of their Bilateral Trade Agreement (BTA) within the next four to five days, according to India’s Commerce Minister Piyush Goyal. As part of the deal, U.S. tariffs on Indian goods will be sharply reduced from 50% to 18% through a U.S. presidential executive order, taking effect immediately. However, India will only lower its tariffs on U.S. products after the legal and formal trade agreement is fully signed, a process expected to take longer. Indian officials noted that such joint statements typically precede binding legal agreements in India’s trade negotiations. Under the framework, India plans to purchase at least US$500 billion worth of U.S. goods over the next five years, focusing on energy, data center equipment, ICT products, and aircraft. Orders for Boeing planes alone are already estimated at US$70–80 billion, potentially exceeding US$100 billion when engines and spare parts are included. While the agreement is seen as a strategic shift in India–U.S. trade relations—particularly in energy, technology, and aviation—analysts caution that tariff cuts enacted via executive order may create long-term uncertainty. Still, the deal signals a significant realignment of bilateral trade flows with implications for global supply chains in the coming years.

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Precious Metals Hit by Sharp Sell-Off as Speculation Overwhelms Fundamentals

The precious metals market is experiencing rare turbulence, with silver plunging nearly 20% to below US$71 per ounce after hitting record highs just a week earlier, while gold fell 3.7% in volatile trading. The move reflects more than normal price fluctuations, as heavy speculative activity—from Chinese retail investors to large equity funds—has flooded commodity markets. Aggressive buying pushed prices of metals such as silver and copper to record levels, even forcing China’s only pure silver mutual fund to suspend new subscriptions due to soaring premiums. According to market observers, current price movements are increasingly detached from real economic and industrial demand. Large inflows into leveraged products and call options built crowded positions in January, which quickly unwound once prices turned lower, triggering a chain reaction of selling across Asian and global markets. The sell-off spilled into base metals, with copper falling up to 2% below US$13,000 per ton. Analysts warn that silver’s high beta, sensitivity to macro conditions, and dominance of automated and fund-driven strategies will likely keep volatility elevated, leaving the market fragile and prone to sharp corrections.

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