US spot Bitcoin exchange-traded funds recorded $561.9 million in net inflows on Monday, snapping a four-day run of outflows and marking their strongest single-day intake since mid-January.

The reversal in flows came despite continued volatility in Bitcoin prices, underscoring a growing divergence between short-term price action and institutional allocation behaviour.

Bitcoin fell to around $75,000 earlier on Monday before rebounding to roughly $78,500 later in the session, still well below levels seen prior to the recent sell-off.

The cryptocurrency climbed about 3% on the day after touching a nine-month low, but remains down roughly 39% from its all-time peak of over $126,000 reached in early October, according to data from CoinGecko.

ETF inflows led by Fidelity and BlackRock

Among US-listed spot Bitcoin ETFs, Fidelity’s FBTC led Monday’s inflows with $153.4 million, followed by BlackRock’s IBIT, which attracted $142 million, according to Farside Investors data.

Bitwise’s BITB added $96.5 million in net inflows, while products from Grayscale, Ark & 21Shares, VanEck, Invesco and WisdomTree also reported positive flows.

The strong showing on Monday followed two consecutive weeks of net outflows for spot Bitcoin ETFs.

The funds shed $1.49 billion last week and $1.33 billion the week before, reflecting heightened investor caution as Bitcoin prices weakened.

In contrast to the rebound in Bitcoin ETF flows, spot Ethereum ETFs saw $2.86 million in net outflows on Monday, following outflows of $252.87 million last Friday.

Galaxy Digital flags downside risks

Despite the pickup in ETF inflows, analysts at Galaxy Digital cautioned that Bitcoin could continue its downtrend, citing a lack of clear catalysts to reverse recent losses.

Alex Thorn, the firm’s research lead, said Bitcoin has historically traded below its realised price at the bottom of previous bear markets and has typically found support “around or slightly below” that level before moving higher.

Thorn also pointed to the 200-week moving average as a key historical support level.

He noted that in each of the last three bull markets, Bitcoin found support near that average after falling below its 50-week moving average.

According to Thorn, Bitcoin lost support at its 50-week moving average in November, while the 200-week moving average currently sits near $58,000.

“Those levels have historically marked cycle bottoms and made strong entry points for long-term investors,” Thorn said.

In a note on Monday, Thorn said there is a “significant chance” that Bitcoin could fall toward $70,000, the bottom of a gap in supply, before potentially testing its realised price of around $56,000, which represents the average cost basis of all Bitcoin in circulation.

He added that Bitcoin continues to struggle to trade alongside gold and silver as part of a broader “debasement hedge trade,” with narratives currently working against the asset.

Bernstein sees potential bottom near cycle highs

A more constructive medium-term view was outlined by analysts at Bernstein, who said Bitcoin could bottom around its prior cycle high in the $60,000 range before staging a recovery, potentially in the first half of the year.

The analysts, led by Gautam Chhugani, said the recent downturn follows a period of strong outperformance by gold relative to Bitcoin, with the cryptocurrency’s market capitalisation versus gold approaching a two-year low as central banks ramp up gold purchases.

However, Bernstein argued that the current weakness may represent a short-term correction rather than the start of a prolonged bearish cycle.

The firm cited strong institutional participation through Bitcoin ETFs, which it said have amassed $165 billion in assets, as well as continued adoption by corporate treasuries.

The analysts also pointed to the absence of miner-driven capitulation, a feature of past downturns.

Instead, miners have diversified revenue streams toward AI-related data centre activity, reducing reliance on Bitcoin prices alone.

Policy dynamics in the US were highlighted as a potential longer-term catalyst, with Bernstein noting the creation of a Strategic Bitcoin Reserve using seized government holdings and possible shifts in Federal Reserve leadership.

“We just don’t see a passive US government if the digital asset markets keep sliding,” the analysts wrote.

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Palantir Technologies reported stronger-than-expected fourth-quarter results on Monday, sending its shares sharply higher in premarket trading as investors reacted to accelerating growth in both government and commercial demand for its artificial intelligence-driven software.

In premarket trading on Tuesday, Palantir shares rose about 11% after the company beat Wall Street expectations on earnings, revenue, and forward guidance, reinforcing its position as one of the most closely watched beneficiaries of rising AI spending.

Earnings beat and strong guidance lift shares

Adjusted earnings per share came in at 25 cents, above Wall Street’s consensus estimate of 23 cents and up from 14 cents a year earlier.

Quarterly revenue reached $1.41 billion, exceeding expectations of about $1.34 billion and marking a 70% year-on-year increase.

Chief executive officer Alex Karp said the company’s performance had surpassed even its own internal targets.

“Such a massive acceleration in growth, for a company of this scale and size, is a remarkable achievement — a cosmic reward of sorts to those who were interested in advancing our admittedly idiosyncratic project and embraced, or at least did not wholly reject, our mode of working,” Karp said.

Palantir also issued first-quarter and full-year 2026 guidance that came in well above current analyst projections, adding to the positive market reaction.

US commercial and government demand accelerates

Growth was especially strong in Palantir’s core US market, where sales rose 93% from a year earlier.

Commercial revenue stood out, jumping 137% year over year to $507 million, as large companies increased spending on AI tools to manage and analyze vast datasets.

Sales to the US government reached $570 million, up 66% from the prior year, pushing total US quarterly revenue above $1 billion for the first time.

Palantir’s software is used by a range of government agencies, including the Department of Defense, the Internal Revenue Service, and the Department of Homeland Security.

The company has continued to deepen its defense footprint.

In December, Palantir announced a new contract with the United States Navy worth up to $448 million.

Earlier, in July, it signed a software agreement with the US Army valued at up to $10 billion.

International revenue remains a weaker spot, though it still grew 22% year over year during the quarter.

Profitability improves, valuation debate continues

Palantir’s profitability metrics also strengthened.

The company posted a 41% operating margin in the fourth quarter and converted 47% of its 2025 sales into free cash flow.

It now holds more than $7 billion in cash and marketable securities.

Despite the strong results, valuation remains a point of debate among investors.

At a forward price-to-earnings multiple of around 145, Palantir is among the most richly valued stocks in the market, though still below Tesla’s multiple of roughly 206.

William Blair analyst Louie DiPalma said he was encouraged by the report.

“In our view, shares will trend back above $200 per share over the next year,” he wrote in a note to clients.

Palantir’s stock rose 135% in 2025 but entered 2026 under pressure, down about 17% year to date at Monday’s close after a broader pullback in software stocks linked to concerns over AI valuations.

Karp described the quarter as exceptional, telling CNBC that the results were “the best results that I’m aware of in tech in the last decade.”

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French authorities have stepped up scrutiny of Elon Musk’s social media platform X after police raided its Paris offices and prosecutors broadened a long-running criminal investigation.

What began as a probe into alleged algorithm abuse and data practices has now expanded to include complaints linked to the platform’s artificial intelligence chatbot, Grok, as well as potential criminal offences tied to illegal content and image rights.

The move signals a tougher stance by French prosecutors as they assess whether X complies with national laws while operating in the country.

The Paris prosecutor’s office confirmed that the raid took place on Tuesday and forms part of a cybercrime investigation that has been underway for a year.

Prosecutors said the scope of the case has widened following new complaints and evidence, bringing fresh legal risks for the company and its senior leadership.

From algorithms to AI scrutiny

The original investigation centred on suspected abuse of algorithms and the alleged fraudulent extraction of data by X or individuals linked to the company.

According to prosecutors, those concerns remain active and are now being examined alongside new allegations related to the functioning of Grok, the AI chatbot integrated into the platform.

The expanded probe will assess whether the platform may have been complicit in the detention and diffusion of images of a child-pornographic nature.

Prosecutors are also examining alleged violations of a person’s image rights through the circulation of sexually explicit deepfakes.

These potential offences significantly broaden the legal exposure for X beyond technical or regulatory breaches.

French authorities said the decision to widen the investigation reflects the nature of complaints received and the way the platform’s automated systems operate, including how content is processed and distributed.

Lawmaker complaint and data processing claims

The Paris prosecutor’s office said the case was initially triggered after a lawmaker contacted authorities with concerns that biased algorithms on X could have distorted the operation of an automated data processing system.

That allegation led prosecutors to open a formal inquiry and assign the case to specialist cybercrime units.

The investigation is being conducted by the prosecutor’s cybercrime division in cooperation with the French police’s own cybercrime unit.

Europol is also involved in the investigation.

Prosecutors said the investigation is being carried out with a view to ensuring that X complies with French law insofar as it operates on national territory, framing the process as a constructive approach rather than a punitive one at this stage.

Executives summoned as probe deepens

As part of the widened inquiry, Elon Musk and former X chief executive Linda Yaccarino have been summoned to appear at a hearing scheduled for April 20.

Other members of the X staff have also been called as witnesses.

There was no immediate response from X following the raid or the announcement of the expanded probe.

In July, Musk rejected the initial accusations and said French prosecutors were pursuing a politically motivated criminal investigation.

Prosecutors leave X

In a related move, the Paris prosecutor’s office said it has stopped using X for official communications.

It will instead publish updates via LinkedIn and Instagram going forward.

LinkedIn is owned by Microsoft, while Instagram is operated by Meta.

The shift highlights how French judicial authorities are reassessing their engagement with social media platforms amid rising concerns about platform governance and compliance.

The widening of the investigation marks a significant escalation in France’s approach to policing digital platforms, with X now facing a broader set of allegations that extend well beyond its original algorithm practices.

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Indian markets have cheered the end of the impasse over the US–India bilateral trade agreement, with some analysts hoping that the breakthrough could encourage foreign investors to return to Indian equities.

For much of the past year, foreign institutional investors (FIIs) have remained on the sidelines, weighed down by geopolitical uncertainty, trade frictions, and slowing corporate earnings.

The recent progress in trade negotiations has offered a rare moment of clarity, prompting hopes that global capital flows may gradually turn in India’s favour.

“If you set aside the nitty-gritties of the trade deal and the formal agreement, which is yet to be signed, the development is by and large a booster for market sentiment,” Kranthi Bathini, director of equity strategy at WealthMills Securities, told Invezz.

“The US-based FPIs especially have been on the sidelines due to the friction in US-India relations in the last six months, therefore the current trade deal sends across a positive sentiment to investors across the globe,” Bathini added.

Foreign investors retreat amid trade tensions while DIIs keep Indian equities afloat

Foreign investors have been persistent sellers of Indian equities since mid-2025, with only brief interruptions in October and November.

Data from the National Securities Depository Limited (NSDL) shows that FIIs have withdrawn ₹106,606 crore net from equities since early August 2025, when the United States imposed additional tariffs on Indian goods, raising the effective rate to around 50%.

However, the pace of selling showed signs of easing in early February, with FIIs turning net buyers to the tune of ₹1,906 crore over the first two trading sessions.

While foreign investors retreated, domestic institutional investors (DIIs) played a stabilising role in the market.

Throughout 2025, DIIs emerged as consistent buyers, cushioning the impact of foreign outflows and preventing deeper market corrections.

In January 2026 alone, domestic institutions purchased Indian equities worth ₹67,183.01 crore, underscoring the growing importance of local capital in sustaining market momentum.

According to a report by Motilal Oswal Financial Services, DII equity inflows reached a record $90.1 billion in 2025, compared with $62.9 billion in the previous year.

Over the past decade, DIIs have invested $255.8 billion cumulatively in Indian equities, highlighting a structural shift in the market’s investor base.

Analysts say that without these domestic inflows, Indian equities would have faced significantly sharper declines amid the wave of foreign selling.

Why the trade deal could act as a sentiment catalyst for FIIs

Market participants broadly agree that the easing of trade tensions has improved the narrative around Indian equities.

Motilal Oswal Financial Services noted that strained trade relations since April 2024 had weakened foreign investors’ outlook on India, contributing to the market’s underperformance relative to peers.

Over the past year, India has lagged other emerging markets by around 40%, reflecting both external pressures and domestic headwinds.

Now, improving geopolitical signals could trigger a sharp shift in foreign flows.

“A large chunk of US FII capital will likely shift here, viewing India as the premier strategic play among emerging markets. The current high pessimism? It’ll get trapped in a sharp rally fueled by short covering. DIIs and retail will pile in, amplifying flows from all sides—get ready for the upside!” said Divam Sharma, Co-Founder and Fund Manager at Green Portfolio PMS.

Seema Srivastava, senior equity research analyst at SMC Global Securities, said the agreement signals policy stability, growth revival, and improved sectoral prospects, which together strengthen investor confidence.

“Overall, the deal reduces geopolitical and trade risks, a key determinant in FPI allocation decisions. While execution risks and global demand conditions remain important variables, the agreement is widely seen as a structural positive that will re-anchor FPIs to India’s growth story,” Srivastava said.

Bathini added that Indian markets had entered an oversold zone after months of weak performance and that the trade breakthrough arrived at a critical moment.

Going forward, investors are likely to focus on domestic growth trends, monetary policy signals from the Reserve Bank of India, and the durability of the trade agreement, he said.

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Merck closed the fourth quarter with earnings and revenue ahead of Wall Street estimates, supported by strong demand for its blockbuster cancer drug Keytruda and accelerating sales from newer medicines.

The performance, however, was tempered by guidance for 2026 that landed below expectations, reflecting the growing impact of patent expirations and pricing pressures.

As several established drugs face generic competition and policy changes reshape parts of the US market, the company is leaning on its oncology portfolio, cost cuts, and acquisitions to steady revenue growth in the years ahead.

Modest guidance highlights transition phase

Merck forecast 2026 revenue of between $65.5 billion and $67 billion, below the $67.6 billion expected by analysts.

Adjusted earnings are projected at $5 to $5.15 per share, also short of the $5.36 per share consensus.

The earnings range factors in a one-time charge of about $9 billion, or roughly $3.65 per share, linked to the acquisition of Cidara, a biotech firm developing a flu prevention drug.

The guidance also assumes what the company described as manageable effects from the drug pricing agreement reached with President Donald Trump in December and changes to the US pediatric vaccine schedule.

Under the most favoured nation deal, Merck agreed to sell existing medicines to Medicaid patients at the lowest prices offered in other developed markets and to apply similar pricing guarantees to new drugs.

In return, the company secured a three-year exemption from tariffs.

The outlook also reflects the expected loss of patent protection later this year for several medicines, including diabetes treatments Januvia and Janumet and the surgical drug Bridion, which together represent a smaller but meaningful revenue stream.

Fourth-quarter results top estimates

For the December quarter, Merck reported adjusted earnings of $2.04 per share on revenue of $16.4 billion.

Experts had expected earnings of $2.01 per share and revenue of $16.19 billion.

Net income came in at $2.96 billion, or $1.19 per share, compared with $3.74 billion, or $1.48 per share, a year earlier.

Revenue rose 5% year on year, reflecting continued momentum in the company’s pharmaceutical unit and steady growth in animal health.

Excluding acquisition and restructuring costs, earnings came in at $2.04 per share, while management reiterated plans to cut $3 billion in costs by the end of 2027.

Those savings are intended to help offset revenue losses expected when Keytruda’s patent expires in 2028.

Oncology pipeline drives pharmaceutical sales

Merck’s pharmaceutical division generated $14.84 billion in quarterly revenue, up 6% from the same period last year.

Keytruda remained the primary growth driver, with sales of $8.37 billion, up 7% year on year and slightly above StreetAccount expectations.

Growth was supported by increased use of the drug in earlier-stage cancers and sustained demand for metastatic cancer treatments.

The subcutaneous version of Keytruda, approved last year, delivered $35 million in sales during the quarter.

Merck views this formulation as a key lever to cushion the impact of patent expiry for the intravenous version later in the decade.

Another contributor was Winrevair, a newer treatment for a rare and often fatal lung condition.

The drug generated $467 million in sales, a 133% increase from a year earlier, beating analyst expectations.

The rise reflected stronger uptake in the US and early launches in select international markets following its mid-2024 debut.

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The Schwab US Dividend Equity ETF (SCHD) is doing well this year and is constantly beating the broader market, including the S&P 500 and the Nasdaq 100 indices. 

SCHD has jumped by 8.50% this year and is now hovering at its all-time high, while the S&P 500 has risen by just 1%. This article explores the main reason why the SCHD ETF is thriving this year.

SCHD ETF is thriving as rotation from AI companies continue 

The SCHD ETF is firing on all cylinders this year and is up by nearly 30% from its lowest level in April last year. 

The main reason behind the rally is the ongoing rotation from technology stocks to value names.

A closer look shows that most technological stocks have crashed and moved into either a correction or a bear market.

NVIDIA, a top player in the AI industry, has dropped by 10% from its highest level in 2025. Similarly, Microsoft stock has plummeted to $430, down by 22% from its all-time high.

Other software companies, including popular names like Palantir, ServiceNow, Intuit, and Salesforce, have all crashed.

On the other hand, investors have turned to other value companies that have underperformed the broader market in the past few months.

Soaring energy prices have boosted the SCHD stock 

The other main reason behind the ongoing SCHD stock rally is the energy sector. Data shows that the energy segment is the biggest part of the index, with companies in the industry accounting for 20% of the fund.

Energy stocks have jumped in the past few months as crude oil has soared. Brent, the global benchmark, rose to $70 as the risk that the United States will attack Iran rose. 

Data shows that the State Street Energy Select Sector ETF (XLE) jumped to a high of $51, up by 40% from its lowest level in April last year. The ETF has jumped to a record high.

Some of the top energy stocks in the SCHD ETF are Chevron, ConocoPhillips, EOG Resources, and Valero Energy.

Corporate earnings to impact its performance 

The SCHD ETF stock will have some notable catalysts this week. The most important one will be key corporate earnings, including top companies like Palantir, Walt Disney, AMD, Merck, Amgen, Pfizer, Alphabet, Eli Lilly, AbbVie, Qualcomm, Boston Scientific, ConocoPhilips, Bristol-Myers Squibb, ICE, Philip Morris, and Biogen.

These companies will publish their earnings, which will provide more information about their performance in the fourth quarter. Analysts expect the report to show that these companies continued doing well in the quarter.

The other potential catalysts for the SCHD ETF this week will be the upcoming US non-farm payrolls data, which will come out on Friday. It will also react to the decision by Donald Trump to nominate Kevin Warsh as the next Federal Reserve Chair.

SCHD ETF stock technical analysis 

The daily timeframe chart shows that the SCHD ETF stock has been in a strong uptrend in the past few months. It jumped from a low of $23.20 in April last year to the current $29.82.

The fund has remained constantly above the 50-day and 100-day Exponential Moving Averages (EMA). It also moved above the Supertrend indicator and the Ichimoku cloud.

The Average Directional Index (ADX) has jumped to 43, its highest level in over a year, and much higher than last year’s low of 9.68. A soaring ADX indicator is a sign that the momentum is growing.

Therefore, the most likely scenario is where it continues rising as bulls target the next key resistance level at $35. A drop below the key support at $28 will invalidate the bullish outlook.

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The ASX 200 Index retreated for two consecutive days, reaching a low of $8,760 from the year-to-date high of $9,000. This retreat may continue in the next few days as the Reserve Bank of Australia (RBA) prepares to buck the global trend on interest rates.

RBA set to hike interest rates 

The ASX 200 Index continued falling while bond yields rose as market participants predicted that the RBA would deliver an interest rate hike on Tuesday. Most economists see the bank hiking rates by 0.25% to 3.85%.

If this happens, it will mean that the bank has taken a divergent view than other central banks, including the Federal Reserve and the European Central Bank (ECB).

Odds of an RBA rate hike soared after the Australian Bureau of Statistics (ABS) released strong jobs and inflation numbers recently. A report released last week showed that the core and headline inflation remained above the target at 2%.

The trimmed mean inflation report rose to 3.4% in the fourth quarter, higher than the expected 3.3%. Other inflation gauges, including the weighted mean and the headline figures remained above the 2% target. The government blamed the high inflation rate to the end of energy rebates and other temporary factors.

At the same time, the labor market has continued doing well in the past few months, with the unemployment rate continuing to fall and wage growth rising.

Therefore, analysts expect the bank to hike interest rates and maintain them at 3.85% in the foreseeable future. In a note, an analyst from GSFM said:

“Inflation is a clear and present danger, and attending to that danger now by raising the policy rate is the most appropriate response. Failure to do so may well necessitate more aggressive use of the policy rate instrument down the track.”

The rising odds of an RBA rate hike explain why Australian bond yields have continued rising in the past few weeks. Data shows that the five-year yield rose close to 4.8%, and analysts expect it to hit the key 5% target in the near term.

The RBA’s rate hike means that it has deviated from other global central banks that are in an easing cycle, which explains why the Australian dollar has rebounded in the past few months.

ASX 200 Index technical analysis 

The daily timeframe chart shows that the ASX 200 Index has been in a strong uptrend in the past few weeks, moving from a low of $8,382 in November last year to a high of $9,000 this year. It has now pulled back to the current $8,755.

The index has moved below the lower side of the ascending channel. It has moved below the 50-day Exponential Moving Average (EMA).

It has also moved to the Major S&R pivot point level. Therefore, the most likely scenario is where the index continues falling, with the next key target being the key support level at $8,500. On the flip side, a move above that level at $8,900 will invalidate the bearish outlook.

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South Korean equities slumped on Monday, leading declines across Asian markets, as uncertainty over interest rates and fresh doubts about the sustainability of artificial intelligence-related spending weighed heavily on technology shares.

The benchmark Kospi fell as much as 5%, its steepest intraday decline since Nov. 5, prompting authorities to temporarily halt trading, according to an official note.

Heavyweight chipmakers Samsung Electronics and SK Hynix each fell more than 5%, erasing part of the gains that had driven the market to outperform global peers over the past year.

The Korean won also weakened sharply, adding to the risk-off tone.

AI trade under pressure

A combination of global and sector-specific factors prompted investors to unwind positions in previously high-flying names.

Market sentiment was dented by lingering uncertainty surrounding Kevin Warsh’s nomination as the next Federal Reserve chair, alongside volatility in precious metals that has rippled across risk assets.

Technology shares came under additional pressure after comments from Jensen Huang, chief executive officer of Nvidia, who said a proposed $100 billion investment in OpenAI was “never a commitment.”

The remarks raised fresh questions about the scale and pace of future capital spending tied to artificial intelligence, a key driver of equity gains in South Korea.

“Jensen’s comments likely had a near-term sentiment impact, particularly on AI-exposed names that have rallied strongly year to date,” said Gary Tan, a portfolio manager at Allspring Global Investments, in a Bloomberg report. “The remarks primarily served as a profit-taking catalyst, as we see some unwinding of crowded trades across the market.”

From global leader to sharp reversal

Seoul has been among the world’s strongest equity markets since last year, buoyed by voracious global demand for memory chips used alongside AI processors.

That surge lifted South Korea’s total equity market valuation above $3.3 trillion, allowing it to overtake Germany last week as the world’s 10th-largest stock market, just behind Taiwan.

Monday’s selloff marked a sharp reversal of that momentum.

Domestic and foreign institutional investors were net sellers of Korean shares, while retail investors stepped in as buyers, according to market data.

The pullback in Seoul mirrored broader weakness across the region, with the MSCI Asia Pacific Index falling more than 2%.

Currency slide

Pressure was also evident in currency markets.

The Korean won fell as much as 1.3% to 1,459.20 per dollar, its largest daily decline since October, underperforming most Asian peers amid foreign outflows from equities.

Asia-Pacific markets declined on Monday as investors digested private data on China’s factory activity for January, while gold prices extended their losses from the previous session.

The sharp declines underscored how quickly sentiment can turn in markets that had been heavily positioned for continued gains from the global AI boom, as investors reassess both monetary policy risks and the durability of technology spending.

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Asian markets opened the week under heavy pressure as a sharp selloff in South Korean equities set the tone for the region, while investors weighed mixed signals from China’s manufacturing sector, steep losses in precious metals, sliding oil prices, and a major leadership development at Walt Disney.

Asian markets lead declines as South Korea tumbles

South Korean benchmarks led losses across Asia on Monday, with a sharp selloff in technology stocks triggering trading halts and dragging on regional sentiment.

The Kospi index fell more than 4%, while Kospi 200 futures dropped as much as 5%, prompting authorities to temporarily halt trading, according to an official note.

Index heavyweights SK Hynix and Samsung Electronics slid 6.66% and 5.55%, respectively.

The small-cap Kosdaq fell 4.45%.

Elsewhere in the region, Japan’s Nikkei 225 fell 1.03%, while the Topix added 0.59%.

Hong Kong’s Hang Seng Index declined 3.03%, and mainland China’s CSI 300 fell 1.7%.

Australia’s S&P/ASX 200 dropped 1%. The broader MSCI Asia Pacific Index fell more than 2%.

Currency markets reflected the risk-off tone.

The Korean won weakened sharply, while futures tied to major US benchmarks also fell in early Asian trading.

Dow Jones Industrial Average futures lost 0.7%, S&P 500 futures dipped 1.2%, and Nasdaq-100 futures shed 1.6%.

Bitcoin dropped below $80,000 for the first time since April and last traded around $76,700.

China manufacturing activity improves but confidence weakens

China’s factory activity gathered pace in January, according to a private survey released Monday, as manufacturers accelerated production and front-loaded shipments ahead of the extended Lunar New Year holiday.

The seasonally adjusted RatingDog China General Manufacturing PMI, compiled by S&P Global, rose to 50.3 in January from 50.1 the previous month, matching analysts’ expectations in a Reuters poll.

A reading above 50 indicates expansion.

The result marked the strongest level since October, when the index stood at 50.6.

Production accelerated as new orders increased both domestically and abroad, with firms hiring additional staff to manage rising workloads.

Total new orders expanded for an eighth straight month, while new export orders rebounded, supported by demand from Southeast Asia.

However, business confidence slipped to a nine-month low amid worries about rising costs. “Looking ahead, if cost pressures persist while demand recovery is limited, profit margins will remain under pressure,” said Yao Yu, founder of credit research firm RatingDog in a CNBC report.

Jingyi Pan of S&P Global Market Intelligence said subdued confidence and rising geopolitical instability may weigh on demand in the coming months.

The private survey contrasted with an official PMI released by China’s National Bureau of Statistics, which showed manufacturing unexpectedly contracting to 49.3 in January.

Oil and metals slide as geopolitical fears ease

Commodity markets remained volatile after steep losses last week.

Spot gold was down about 6.4% at $4,556 an ounce, while silver fell around 9.5% to $76.43 an ounce.

Silver prices plunged roughly 30% on Friday, marking their worst one-day performance since 1980, while gold dropped about 9%.

Oil prices also fell sharply as investors scaled back fears of supply disruptions.

Brent crude slid as much as 5.2% to $65.69 a barrel, while US West Texas Intermediate dropped 5.34% to $61.76.

The decline followed comments by US President Donald Trump that Iran was “seriously talking” with Washington, signalling a potential easing in tensions.

“The talks are happening at the same time Iran is threatening a regional war should they be attacked, which could lead to substantially higher oil prices, an outcome that the Trump Administration would like to avoid,” said Andy Lipow of Lipow Oil Associates.

Disney board aligns on new CEO

In corporate news, the board of Walt Disney Co. is aligning on promoting theme-park division chairman Josh D’Amaro to chief executive officer, reported Bloomberg, citing people familiar with the matter.

If approved, D’Amaro would succeed Bob Iger, concluding a three-year CEO search.

“The board has not yet selected the next CEO of the Walt Disney Co. and once that decision is made, we will announce it,” a Disney spokesperson said.

Disney is scheduled to report fiscal first-quarter earnings on Monday, with its annual shareholder meeting set for March 18.

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Gold and silver prices fell further on Monday as the impending increases in CME precious metals margin requirements, set to take effect at the session close, weighed on the market, while investors also focused on the potential interest rate stance of Kevin Warsh, US President Donald Trump’s pick for Fed chair.

The gold contract on COMEX dropped 3.6% to trade around $4,577.24 per ounce.

Last week, the contract had hit a record high of above $5,600 per ounce. 

On the other hand, silver prices on COMEX plunged more than 38% from their record high of $120 per ounce to $75 an ounce on Monday. 

CME Group announced on Saturday that it is hiking margins on its metal futures, with the changes taking effect after market close on Monday. 

COMEX gold futures margins (1oz) will be raised from 6% to 8%.

COMEX 5000 silver futures (SI) are set to increase to 15% from 11%. 

Additionally, platinum and palladium futures will also see increases in margin requirements.

Higher margin requirements typically have a negative impact on the contracts they affect.

This is because the increased capital required can reduce speculative interest and liquidity, often forcing traders to close out their existing positions.

Headwinds from new Fed chair selection

Gold continues to face bearish pressures, despite a slight recovery from a three-week low of $4,585 per ounce. 

This is due to persistent buying interest in the dollar, which has stalled any significant recovery for the yellow metal, according to Dhwani Mehta, analyst at FXStreet.

Gold, the traditional safe-haven asset, continues to struggle due to two key developments: easing geopolitical tensions between the US and Iran, which has calmed markets, and Trump’s nomination of Kevin Warsh as the next Federal Reserve Chairman on Friday.

Mehta said in a report:

Meanwhile, markets view Warsh as a proponent of lower interest rates.

They anticipate him to curb the Fed’s balance sheet, which typically supports the dollar by diminishing the money supply in the market, according to Reuters.

Warsh appears to be a strong candidate for Trump’s Federal Reserve Chair, meeting many of the criteria. 

However, uncertainty remains regarding the speed and depth of potential interest rate cuts he might implement, as well as the extent of his intended “regime change” at the Fed.

Market expectations still point to a minimum of two rate cuts in 2026, the CME FedWatch tool showed.

This outlook is generally favorable for non-yielding assets like bullion, which typically perform better when interest rates are lower. 

Geopolitics and economic data

Geopolitical developments, particularly between the US and Iran, along with the forthcoming US economic data—specifically the crucial US ISM Manufacturing PMI—will be the key focus in the near term.

This ISM report is expected to establish the market’s direction, leading up to the release of this week’s vital employment statistics.

“The data flow will help reprice markets’ expectations of further rate cuts by the Fed, with the first cut for this year likely seen in June following the January Fed policy announcements,” Mehta said. 

Meanwhile, the US will “hopefully” reach a deal with Iran, according to Trump, who commented over the weekend following a warning from Supreme Leader Ayatollah Ali Khamenei that a Washington attack could lead to a regional conflict.

The easing of tensions between the US and Iran eroded the safe-haven demand for precious metals such as gold and silver somewhat. 

Technical outlook

The prevailing uptrend is currently paused, as the gold price is trading below the 21-day Simple Moving Average (SMA) but remains above the 50-day SMA. 

This underlying bullish momentum is supported by the SMAs being in a favorable alignment: the 21-day is positioned above the 50, 100, and 200-day averages, with all slopes indicating upward movement, according to Mehta.

Rising longer-term SMAs above the 100 and 200-day levels reinforce the bullish bias, indicating the trend remains well-supported by higher-timeframe averages, she added.

Silver is currently trading at $76.60 on the daily chart. The metal’s price is below the ascending 50-day Exponential Moving Average (EMA), positioned at $79.50. 

Momentum has moderated, as indicated by the Relative Strength Index (RSI) at a neutral 44, following a recent overbought condition. 

Sustaining above the 50-day EMA is key to maintaining buying interest, whereas a daily close below this moving average would signal potential downside risk, according to a FXStreet report.

“If momentum stabilizes, bulls could attempt to extend the recovery, while failure to re-accelerate would keep trade contained,” Sagar Dua, editor at FXStreet, said in a report. 

Meanwhile, Commerzbank AG’s head of FX and commodity research, Thu Lan Nguyen, believes that Trump would want lower interest rates, as it was his stance from the very first day. 

This would, in turn, lead him to put pressure on the new Fed Chair, and therefore, there are probabilities that interest rates will still come down, Nguyen said. 

This suggests that the gold price will remain well supported.

The extent of the correction also suggests that market participants were simply waiting for an opportunity to take profits after the rapid price rise.

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