Gold surged to $4,887 per ounce before paring gains to around $4,840 on Wednesday, as the geopolitical risks that fueled the rally began to ease. The pullback followed President Trump’s remarks in Davos ruling out the use of military force over Greenland, which reduced immediate geopolitical risk, lifted equities and Treasuries, and triggered profit-taking after the sharp rally. Earlier gains were driven by renewed tariff threats tied to Greenland that weakened the dollar and pushed investors toward non-sovereign stores of value, alongside a sharp selloff in Japanese government bonds after election-linked tax-cut pledges raised fiscal concerns. While US 10-year yields remained elevated, a softer dollar and uncertainty over the Fed’s near-term path continued to support bullion, keeping prices well above prior levels despite the loss of upside momentum.

US stocks were higher on Wednesday, trimming the sharp loss from the previous session as markets reassessed their pivots away from US assets following fresh remarks from President Trump in the World Economic Forum. The S&P 500, the Dow, and the Nasdaq 100 were around 0.5% higher. Trump stated the US would not use force in its mission to get Greenland, triggering some respite for US equities and sovereign bonds, but reiterated his administration's will to acquire the land from Denmark and hinted at economic friction with Europe should the deal not be struck soon. Broader sectors rebounded, while Intel, Intuit, and Micron added between 7% and 10% to lead the rebound for tech share. On the earnings front, Netflix tanked 5% after warning of higher program spending and highlighting the cost of the Warner Bros. Discovery deal. Also, Johnson & Johnson lost around 2% despite issuing a higher guidance. On the other hand, United Airlines added 3% after its results.

Producer prices in Canada fell 0.6% month over month in December 2025, the steepest decline in seven months, following an upwardly revised 1.1% increase in November and compared with market expectations for a 0.3% rise. The drop was driven primarily by lower prices for energy and petroleum products (-7.2%), notably refined petroleum energy products (-8.2%), including motor gasoline (-9.6%) and diesel fuel (-7.5%). Prices for lumber and other wood products also declined (-3%). Offsetting some of the downward pressure, prices for primary non-ferrous metal products rose 7.1%, led by sharp increases in unwrought silver and silver alloys (+25.4%), unwrought platinum group metals and their alloys (+15%), and unwrought gold and gold alloys (+3.4%). On a year-on-year basis, producer prices increased 4.9% in December, easing from a 5.9% rise in the previous month.

The average contract interest rate for 30-year fixed-rate mortgages on conforming loans of $806,500 or less in the US fell for a third consecutive week to 6.16% in the week ending January 16, marking a new low since September 2024, according to the Mortgage Bankers Association. As a result, mortgage applications jumped 14.1%, following a 28.5% surge in the previous week. Refinancing applications went up 20.4% and the purchase index increased 5.1%. “Mortgage rates declined further last week, driving another big week for refinance applications, which saw the strongest level of activity since September 2025. These lower rates prompted greater refinance activity from conventional and VA refinance borrowers, with increases of 29 percent and 26 percent, respectively. Refinance applications accounted for more than 60 percent of applications, and the average loan size also moved higher”, said Joel Kan, MBA’s vice president.

US natural gas futures rose more than 20% to $4.7 per MMBtu on Wednesday, extending gains of about 26% earlier in the week, as weather forecasts shifted sharply colder. Forecasts over the long US holiday weekend turned much colder, calling for a deep and widespread Arctic freeze across much of the country in the weeks ahead. Average temperatures are expected to run at least 8°F below normal across the Midwest, Mid Atlantic and parts of New England, with subfreezing conditions spreading deep into Texas and across the South, alongside risks of ice storms and heavy snow. The colder outlook points to sustained heating demand and rising risks of production losses from freeze offs, potentially erasing the recent storage surplus. Up to 10 billion cubic feet per day of freeze offs are possible in Appalachia, with additional risks in the Permian and Haynesville basins. Gas flows have also been diverted from LNG export facilities to meet domestic demand.

UK consumer price inflation rose to 3.4% in December 2025, up from November’s eight-month low of 3.2% and slightly above market expectations of 3.3%. This year-end acceleration, the first since July, could complicate the Bank of England’s efforts to guide inflation back toward its 2% target, though the rise is expected to be temporary thanks to government interventions. The increase was largely driven by higher prices for alcohol and tobacco, which jumped to 5.2% from 4.0% in November due to the timing of tobacco duty changes, and transport costs, which rose to 4.0% from 3.7% on the back of higher airfares. Additional upward pressure came from food and non-alcoholic beverages (4.5% vs. 4.2%). Services inflation, a key gauge of domestic price pressures for the BOE, edged up slightly to 4.5% from 4.4%, below expectations. Core inflation, which excludes volatile items like unprocessed food and energy, remained steady at 3.2%, marking its lowest level since December 2024.