News of the week summary - 25/01/2026
Gold and silver surge amid rising investor caution
Gold prices have jumped sharply this week, marking their strongest performance in nearly two decades. The precious metal briefly reached nearly $5,000 per troy ounce, while silver climbed past $100, reflecting a surge in demand for traditional safe-haven assets. This move comes as investors reassess risks and look to protect their portfolios in a period of heightened uncertainty.
A key factor behind the rally is the dollar’s recent weakness. When the US dollar falls relative to other major currencies, dollar-denominated assets like gold and silver become more affordable for international buyers, boosting demand. Over the past week, the dollar index, which tracks the currency against a basket of peers including the euro and the pound, fell by 1.6 percent, supporting higher metal prices.
Investor sentiment has shifted toward risk management and diversification. Central banks and large investors are increasingly adding gold to their holdings as a hedge against potential market disruptions and currency fluctuations. Over the past two years, this trend has helped drive a sustained rally in precious metals, culminating in the significant gains seen this week.
The recent market volatility stems from a mix of economic, policy, and geopolitical events that have created a more cautious investment environment. Analysts note that in such periods, gold typically retains its role as a store of value, helping investors protect wealth when uncertainty rises. This week’s gains bring gold’s increase to more than 8 percent, its largest weekly jump since the 2008 financial crisis.
EU calls for reform of global trade rules
The European Union has proposed changes to the World Trade Organization’s rules, suggesting that countries should have more flexibility in setting tariffs. This represents a major shift in thinking, as it challenges the long-standing “most favoured nation” principle, which requires WTO members to treat all trading partners equally. The EU argues that in today’s global economy, where countries vary widely in market openness and trade practices, rigid adherence to this principle can create unfair advantages.
The EU’s trade commissioner emphasized that access to lower tariffs should be conditional on countries demonstrating strong commitments to fair competition and transparency. This approach would allow countries to adjust tariffs to protect their economies from unfair practices, such as subsidies or state intervention that distort markets. While no country was explicitly named, the proposal clearly reflects concerns about trade imbalances with major exporters who use such measures to gain a competitive edge.
The discussion comes at a time when global trade is becoming more unilateral, with countries increasingly taking independent actions to protect their domestic industries. The EU’s proposal is intended to spark a conversation on how the WTO can remain relevant, ensuring that trade rules are balanced and that no country can “free ride” on the system. By linking trade benefits to adherence to fair practices, the EU aims to create a more level playing field while maintaining the multilateral trading system.
These proposed changes could have significant implications for global trade, allowing countries more leeway to respond to unfair competition while encouraging transparency and market openness. If adopted, the reform would mark a significant evolution of the WTO framework, moving from rigid equality toward a more conditional system that rewards fair participation.
Bank of Japan signals readiness to support bond market
The Bank of Japan has raised concerns about a sharp rise in government bond yields, indicating it may increase its bond purchases to stabilize markets. This comes after a week of significant selling in Japanese government bonds, known as JGBs, which caused volatility in both the bond and currency markets. The 10-year JGB yield recently reached 2.26 percent, its highest level since 1999, while the yen briefly dropped to an 18-month low against the US dollar and an all-time low against the euro.
Market movements were amplified by a combination of policy signals and political developments. The central bank decided to hold interest rates steady at around 0.75 percent but suggested that further rate increases could occur in 2026 as inflation and wages rise. Meanwhile, a sudden announcement of a general election created uncertainty, particularly as the prime minister proposed temporarily suspending Japan’s consumption tax on food, raising concerns about higher government spending.
The BoJ’s governor emphasized that the bank is prepared to intervene in the bond market if necessary. In practice, buying government bonds can push yields lower and affect the currency by reducing upward pressure on the yen. This week, market speculation about such intervention caused dramatic swings in the yen’s value within minutes. Analysts note that these developments highlight the sensitivity of Japan’s financial markets to both monetary policy and political announcements.
The situation illustrates how bond markets, interest rates, and currency values are closely linked. Rising yields can increase borrowing costs and influence investment decisions, while rapid fluctuations in the yen affect trade and global financial flows. The BoJ’s readiness to act aims to ensure that these movements remain orderly and do not disrupt the broader economy.