Author: IntaCapital Swiss

Will Sweden Lose the Krona and Adopt the Euro?

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Historical Context and the 2003 Referendum

On January 1st, 1995, Sweden, Finland, and Austria joined the EU (European Union) as part of the fourth enlargement, which expanded its membership to 15. In 1999, the single currency was launched, and although Sweden is legally committed to joining the currency (once certain economic criteria are met), it chose not to, citing concerns about sovereignty, as well as economic and political reasons. In 2003, the government of Goran Persson held a non-binding referendum on Euro adoption, but circa 56% of voters rejected the adoption and ever since, successive governments have respected the result.

Monetary Policy and the ERM II Opt-Out

For economic reasons, Sweden has gone down the path of retaining control over their monetary policy and is one of six member countries of the EU that still prefer to use their own currency, and Stockholm still maintains a floating exchange rate. Furthermore, Sweden has opted out of the Union’s ERM II*, which is a mechanism whereby the Euro’s exchange rate with other eurozone countries’ currencies is managed. It should be pointed out that if an EU member country wishes to adopt the Euro, membership of ERM II is mandatory.

*ERM II – The Exchange Rate Mechanism II (ERM II) was set up on 1st January 1999 as a successor to ERM for those EU member countries outside the Euro area who have their own currencies. This was to ensure that exchange rate fluctuations between the Euro and other EU currencies do not disrupt economic stability within the single market, and to help non-Euro area countries prepare themselves for participation in the Euro area.

Shifting Geopolitical and Economic Landscapes

However, in recent years, analysts suggest that support from the public has grown in favour of adopting the Euro, although experts within this arena say that it would probably take several years to bring adoption to fruition. Officials within the Swedish government have suggested there has been a significant shift in both the geo-economic and geopolitical landscapes since the 2003 non-binding referendum, which has boosted the case for closer ties with the EU.

Global Rivalries and the Case for Integration

Ministers have cited the Russian invasion of Ukraine, which, after many years of non-alignment militarily, prompted Sweden to join NATO and the increasing global influence of China as valid reasons for closer integration with the EU. Furthermore, President Trump’s ‘America First’ policies, marked by disruptive tariffs and threats to annex Greenland, underscore how modern great-power rivalries leave smaller economies increasingly exposed.

Commercial Advantages of the Common Currency

Analysts suggest that on the plus side for adopting the Euro, data released show that over 60% of Sweden’s goods trade is transacted with the EU and only circa 6.4% is with the United States. Therefore, some commentators are suggesting that with 60% of trade being transacted with the eurozone, joining the common currency would eliminate exchange rate fluctuations (which with the Krona can be volatile at times), also eliminating any uncertainty for both importers and exporters. Several senior voices across the economic strata of Sweden are advocating joining the Euro for these very reasons, plus they say that there will be greater commercial benefits across the board rather than clinging to the diminishing advantages of retaining independent monetary policies.

Arguments for Retaining Monetary Independence

However, some experts still oppose adopting the Euro, suggesting that giving up the independence of monetary policy would harm the Swedish economy as interest rates can be set in alignment with domestic conditions, rather than following decisions made by the ECB (European Central Bank). Experts have also voiced concerns that, according to data released, the debt within the euro area is currently 80% of GDP, whereas Sweden’s debt-to-GDP sits at circa 33%. One expert suggests that, given the borrowing trends within the euro area, a common currency collapse is not out of the question.

The Path Forward: Referendums and Elections

However, there will have to be another Euro adoption referendum in order to give any potential switch legitimacy, and whilst the public is warming to an adoption of the Euro, polls suggest that there are more voters against than for the adoption. This coming September, there is a general election and political commentators suggest that any significant movement on this issue will be shelved until a new or the same government is elected.

Global Market Jitters and Sell America

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The Shift in Global Sentiment

The US Dollar is viewed as the world’s reserve currency; US Treasuries are among the top safe-haven assets, and US financial markets are regarded as the most liquid and exceptionally deep. However, there is a sentiment running through many major financial centres that perhaps it is time for global markets/investors to sell America. This narrative has not taken place this year, as analysts look back to 2nd April 2025, when they feel it began when President Trump announced his Liberation Day tariffs and upended the global trading system as we knew it.

Geopolitical Tensions and Economic Implications

This feeling of sell America became more pronounced in January of this year when President Trump announced he wished to take over Greenland, which is part of Denmark and a NATO ally, which fired up more anti-American/Trump sentiment among Europe’s leaders. However, analysts advise that this sentiment has died down for the time being, but if there was a measured shift towards sell America, the implications for the US economy could well be severe. For many decades, the United States has enjoyed unparalleled faith in their currency and the treasury market from overseas investors who have ploughed funds into the US economy.

If sentiment moves away from US assets, as they are now considered not to be the safest of havens, experts advise that if overseas investors begin to sell, the US Dollar would weaken, and the availability of capital to both companies and the government would shrink considerably. Indeed, some experts fear that if US consumers face increasing costs as imports become more expensive, whilst at the same time borrowing costs go up, it could become an ongoing cycle where recession rears its ugly head as the federal deficit becomes less sustainable.

Eroding the Foundations of US Investment 

Experts argue that since the early 1960s (if not earlier), overseas investors have been attracted to the United States due to several factors such as a stable US Dollar, a commitment to free trade, extremely deep capital markets, superior bond ratings, legal protections and an independent monetary policy ( independent Federal Reserve). If any of the above start being stripped away, analysts advise that financial markets would probably react negatively towards US assets and the greenback. An example of this is the debasement trade* where markets and investors sell currencies they feel are being devalued due to the incumbent government policies.

The Rise of the Debasement Trade

*Debasement Trade – A financial strategy where investors invest in assets such as Bitcoin and gold as a hedge against the devaluation of fiat currencies is known as a debasement trade, with key takeaways being rising sovereign or government debt, geopolitical instability, and inflation. Experts advise that investors have been selling major currencies and running to alternative assets such as gold (both physical and ETF), silver, Bitcoin, and even some collectables such as Pokémon cards, which in mid 2025 reached an all-time high.

Pressure on the Federal Reserve

President Trump’s continued attack on the current Federal Reserve, Chairman Jerome Powell, for not lowering interest rates and his rhetoric regarding the reduction of their independence has continued to spook financial markets. This was reflected in April 2025 when the stock markets (S&P 500, Dow, Nasdaq) fell by more than 2%, and the US Dollar plunged to a three-year low. The above was described by experts as a significant event and occurred after President Trump described Fed Chairman Jerome Powell as a ‘major loser’ as he increased his attacks on the central bank.

Market Volatility and the Greenland Conflict

Another example of global market jitters came on 20th January this year, following President Trump’s social media postings which threatened 10% – 15% tariffs on countries (including Denmark, France, Germany and the UK) if his European allies tried to block his takeover of Greenland. This triggered a sharp sell-off where the Dow Jones fell 1.8%, the S&P 500 fell over 2%, wiping off $1.2 Trillion in value, and the Nasdaq Composite fell by 2.4% with tech stocks leading the way. Investors fled to safe havens, helping to push gold beyond a new record of $4,000po. However, the markets bounced back the following day, as in Davos at the World Economic Forum, President Trump announced a de-escalation, stating he would not use force over Greenland and promised a future framework of a deal with NATO, plus he withdrew the imminent threat of tariffs.

Resilient Corporate Growth and Hedging Strategies

However, several experts advise that it might be difficult to “Sell America” where corporate earnings growth has seriously outpaced their peers in any other regions across the globe, and despite the current risks, the pull of the USA is hard to dismiss. In the Eurozone, for example, the governments would find it difficult to weaponise US assets such as bonds, stocks and shares as most of the ownership is held by the private sector. Another scenario being offered by some analysts is that investors may be choosing to hedge their bets in the United States. This is where investors continue to purchase bonds, stocks, etc., but at the same time hedge their investments by purchasing derivatives, which will protect them against future declines in the US Dollar. This can take the form of selling U.S. dollars forward in the F/EX markets, which can put downward pressure on the greenback despite funds still flowing into the country.

Positive Indicators and Global Dominance

Despite the calls for “Sell America” and de-dollarisation, the outlook on the United States remains somewhat positive. Earnings growth projected by analysts is 14% – 16% EPS  (earnings per share) for the S&P for this year, driven by corporate tax benefits and AI efficiency. US treasuries currently represent 68% of all global sovereign issuance and are still seen as a haven in times of financial markets and geopolitical stress, albeit slightly tarnished at the moment.

Future Outlook for the Reserve Currency

Analysts point out that emerging markets in Asia and Latin America are experiencing heavier inflows of capital as global investors seek to spread risk away from the United States. However, data released shows that the US Dollar accounts for circa 50% of trade invoices for global trade and remains the dominant currency in international transactions. Furthermore, the greenback accounts for circa 88% of all foreign exchange transactions and represents 58% of global foreign exchange reserves, so any thoughts of the USD losing its status as the world’s reserve currency can be put on hold for now. However, analysts have warned that “Sell or Hedge America” will still be uppermost in the minds of overseas investors in the United States.

Demand for the Swiss Franc Reaching Extraordinary Levels

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The current demand for the Swiss Franc has pushed the currency 2.00% higher against the Euro and 3.50% higher against the US Dollar, the highest the Franc has been against both currencies for over a decade. Investors have piled into the currency, with some experts suggesting they are treating the CHF as the safest haven in the market, as Switzerland has only a modest debt, predictable policies and a stable economy.

However, the SNB (Swiss National Bank) may pose a risk to investors, as to curb deflationary pressures, they may intervene in the currency markets. Another option open to the SNB, is to move interest rates into negative territory (currently 0.00%); however, the President of the SNB, Martin Schlegel, said in the past that such a move faces some serious headwinds but would do so if necessary. However, the SNB has a delicate line to tread as negative interest rates will upset savers, individuals, insurance companies and pension funds, whilst currency intervention may risk a rebuke from the United States.

Analysts suggest that the recent surge may also be partly due to a Swiss Franc Bond issued by Alphabet, the parent company of Google. Analysts advise that a five-part bond sale raised CHF3.055 Billion spanning maturities of 3 – 25 years. This bond sale was part of a $31.50 Billion global bond raise with Alphabet selling a rare 100-year bond, which raised £1 billion with a coupon of 6.125%, and further sales of sterling bonds in a five-part offering raised £5.5 billion.

Financial markets suggest that the EUR/CHF rate is projected to remain under pressure, possibly trending towards 1.04 -1.06, indicating continued CHF appreciation. The Swiss Franc has previously shown and is currently showing high resistance to other major currencies, including the US Dollar, as the currency continues to be supported by safe haven demand, particularly in times of geo-economic and geopolitical turbulence.

Bitcoin and Volatility

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Recent Market Movements and Sentiment

As of this week, Bitcoin has rebounded to circa $70,899, then dropped 2% to circa $69,037. This comes after a significant decline from a market high of $122,200 in October 2025, including a fall several days ago to a 16-month low of $60,074.20. In just under four months, Bitcoin has declined nearly 50% and once again reignited debate over the cryptocurrency’s stability. Cryptocurrency experts suggest that sentiment towards Bitcoin is not overly bearish and advise that the coin could go higher to $73,000 – $75,000, where they expect initial resistance to occur. However, analysts report that traders remain on edge, uncertain as to whether or not the worst is over, but suggest that $60,000 is the main support on the downside.

The Shift in Market Concentration and Volatility

The extended slide in Bitcoin began last October after the coin had hit its peak, having been pushed higher for most of 2025 by the pro-crypto agenda emanating from the White House. This week, the value of the cryptocurrency market is circa $2.5 Trillion, of which Bitcoin accounts for circa 60%. Also, on Thursday, 5th February, the Bitcoin Volmex Implied Volatility Index* surged from 57% to over 97%. One expert announced that volatility had doubled from the previous week, and data released showed that investors had pulled on the same day, $434 Million from US ETFs (Exchange Traded Funds) alone.

*Bitcoin Volmex Implied Volatility Index – is designed to measure the constant 30-day expected volatility of the Bitcoin options market derived from real-time crypto call and put options.

Historical and Political Catalysts for Market Whipsaws

The catalyst for whipsaw reactions in the Bitcoin market has been different, starting with the late 2022 collapse of FTX*, resulting in Bitcoin plummeting to its lowest price for two years. In October last year, the coin collapsed from its peak, wiping out in a single day billions of dollars of trading positions due to, say experts,  President Donald Trump issuing a boatload of tariff threats. Analysts suggest that due to the tariff threat and its negative impact on Bitcoin, investors in the currency now have a reduced appetite for buying digital tokens and coins in general, thus making it harder for the coin to recover lost ground over the longer term.

*FTX – The 2022 collapse of FTX, a cryptocurrency exchange, once valued at circa $32 Billion, triggered massive industry-wide losses, severe regulatory crackdowns and a $1 Billion multi-year bankruptcy process to repay creditors. Driven by a liquidity crisis, the fall-out revealed misuse of customer funds by Alameda Research, leading to criminal charges for founder Sam Bankman-Fried and widespread contagion in the crypto markets.

Geopolitical Tensions and Early 2026 Turbulence

This year has hardly begun, and we have already seen dramatic volatility in Bitcoin. The initial fall in January was, according to experts, due to inflamed geopolitical tensions, including President Trump’s threats to take over Greenland, a country belonging to Denmark and therefore a NATO ally. The geopolitical problems led to a sell-off in global stocks and commodities, including gold and silver, which experts suggest was part of the reason for the drastic fall in the price of the cryptocurrency.

The Impact of Federal Reserve Leadership and the Strong Dollar

The recent fall in Bitcoin has been attributed to the announcement by President Trump of his pick for the New Chairman of the Federal Reserve, Kevin Warsh, who is to replace the incumbent Jerome Powell. Financial markets and investors will, say technical analysts, see his reputation as a strong dollar and inflation hawk as a sign that any rapid rate cuts as advocated by President Trump will not happen. As a result, the dollar spiked, and Bitcoin moved sharply lower. As can be seen, there have been tentative rallies in Bitcoin that have attracted the dip buyers who, as soon as prices reverse, immediately sell, draining further liquidity from the market.

Declining Institutional Demand and the “Crypto Gold” Debate

Several crypto commentators have also said that institutional demand has fallen off, and further suggested that the coin, which has in the past been referred to as a type of crypto gold as a hedge against currencies and stocks falling, and other market stress, is no longer tenable. Experts suggest that the market continues to be somewhat fragile, and with US-listed Bitcoin ETFs continuing to experience persistent outflows, the expectation of further monetary easing taking a back seat, plus the strengthening of the US Dollar, institutional portfolios are treating crypto assets as less of a priority.

The Bull Case and Long-Term Outlook 

Whilst there is definitely a bearish outlook in the Bitcoin market, the Bulls still suggest that the price could go as high as $175,00 with some claiming as high as $250,000. Some experts suggest that the market’s interpretation is wrong, and point to Mr Warsh’s statement supporting lower rates. They also pointed out that perception rather than fundamentals drove much of the recent sell-off, and historically, after a spate of selling, Bitcoin goes on an extended bull run, plus the fact that Bitcoin’s hard cap of 21 million coins remains a crucial anchor for long-term value. However, whatever the pros and cons, Bitcoin will, for the time being, be subject to bouts of volatility.

The ECB keeps Interest Rates on Hold

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The ECB (European Central Bank) recently announced that for the fifth consecutive policy meeting, it was keeping interest rates on hold at 2.00%. Following the meeting, officials noted the economy’s resilience but offered no forward guidance on interest rates, stating instead that future decisions will be strictly data-dependent. 

The Three Key Interest Rates Explained

The ECB manages its monetary policy through three distinct interest rates. First is the key deposit rate, which—as previously noted—was held at 2.00%; this is the interest rate commercial banks receive when they deposit money overnight with the ECB. The second facility is the Main Refinancing Operations (MRO) rate, maintained at 2.15%, which represents the interest banks pay when they borrow funds from the ECB for a one-week duration. Finally, the Marginal Lending Facility was held at 2.40%; this is the rate banks must pay when borrowing from the ECB on an overnight basis. President Christine Lagarde said the ECB would not commit to a particular path for the rate and would maintain its meeting-by-meeting approach and its reliance on data.

Inflation Outlook and Economic Resilience

Data released last Wednesday confirmed that inflation had cooled to below the ECB’s 2.00% target, sitting at 1.7% as of the 31st of January 2026. President Lagarde said, “Our rate decisions will be based on our assessment of the inflation outlook and the risks surrounding it.” ECB officials also advised, “Inflation should stabilise at its 2% in the medium term. The economy remains resilient in a challenging global environment. Low unemployment, solid private sector balance sheets, the gradual rollout of public spending on defence and infrastructure and the supportive effects of the past interest rate cuts are underpinning growth.”

Trade Risks and Growth Constraints

However, future growth may be dragged down, as cautioned by Executive Board Member Piero Cipollonne, who noted last week that there was an increased risk scenario whereby tariffs could curb investment and bring down growth. President Lagarde also noted that challenges still remain, even though the region’s fiscal boost could fuel quicker-than-anticipated growth. She went on to say, “Further frictions in international trade could disrupt supply chains and reduce exports and weaken consumption and investment”.

Currency Fluctuations and Market Sentiment

Market experts indicate that recent rhetoric from the ECB suggests the Governing Council is broadly satisfied with the current state of the economy, inflation levels, and interest rate positioning. There may be some concern that the Euro has broken through the $1.20 threshold, as it was sitting at $1.1812 not long before, and global investors have taken a more cautious stance regarding U.S. assets. Officials have advised they are keeping a close watch on the currency’s advance, with the Governor of the Banque de France, Villeroy de Galhau, noting that the currency’s path will help guide future decisions. Analysts advise that financial markets have adopted a wait-and-see policy, as some traders feel that interest rates will remain steady for the next eighteen months to two years.

Bank of England Keeps Interest Rates on Hold

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A Tight Decision on Rates

Yesterday, the BOE’s (Bank of England) MPC (Monetary Policy Committee) voted 5–4 in a tight decision to keep interest rates steady at 3.75%, the lowest level since February 2023. The four dissenting members all voted to cut interest rates by 25 basis points. Recent data for December 2025 has hinted at stickier inflation, which some analysts were not expecting. Consumer prices have also ticked higher, which experts say likely swayed the MPC’s decision into holding rates at this time. However, policymakers indicated after the meeting that they expect inflation to fall in the coming months, paving the way for further interest rate cuts.

The Inflation Outlook

BOE Governor Andrew Bailey said, “We now think inflation will fall to around 2% by the spring. That’s good news, and we need to make sure inflation stays there, so we’ve held rates unchanged at 3.75% today. All going well, there should be scope for some further reduction in bank rates this year.” The MPC advised that they expect inflation to fall much quicker than anticipated. They stated that this was due to Chancellor Reeves’ package of anti-inflation measures announced in her budget speech in November 2025. 

However, three months ago, gross domestic product (GDP) was estimated by the MPC to grow by 1.2% in 2026, but this estimate has now been revised downwards to 0.9%. Alongside weaker growth, officials advised that the outlook for unemployment remains bleak, peaking in Q2 at 5.3%, up 0.20% from the previous official notification. 

Labour Market and Future Expectations

Data released shows that across 2026, unemployment is circa 0.30% higher than originally advised, which experts say translates into 100,000 more people out of work. As mentioned above, inflation is expected to fall to 2.00% by spring this year, and officials advise that they expect the rate to stay at that figure until the start of 2029. Figures released showed inflation hitting 3.4% in December 2025, making it nearly impossible for the MPC to cut rates today. It was a much closer vote than expected, and financial markets are now confident of two 25 basis point cuts by this coming summer.

Gold and Silver Suffer Dramatic Selloffs

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On Friday, 31st January, the metals market saw prices plummet with gold recording a fall of 12%, reflecting its biggest slump since the 1980s. Silver also recorded a fall of 36% (a drop of $40 in less than 20 hours), a record for intraday trading. 

The 2025 Bull Run and the Debasement Trade

Throughout 2025, both gold and silver enjoyed successful bull runs culminating in record prices driven up by threats to the Federal Reserve’s independence, geopolitical and geoeconomic turmoil, currency debasement trades* and latterly a massive buying spree by Chinese investors. *The Debasement Trade – A financial strategy where investors divest themselves of fiat currencies and sovereign bonds, and invest in hard assets such as precious metals like gold and silver. Key takeaways are rising sovereign or government debt, geopolitical instability, and inflation. Experts advise that investors have been selling major currencies and running to alternative assets such as gold (both physical and ETF), silver, Bitcoin, and even some collectables such as Pokémon cards, which recently reached an all-time high.

The Catalyst: A Shift in Federal Reserve Leadership

Experts advise that the start of the collapse in gold and silver prices was due to President Donald Trump announcing that his pick for the new chair of the Federal Reserve would be Kevin Warsh. Analysts suggest that the financial markets see Warsh as extremely tough on inflation, which gave the markets an expectation of tighter monetary policy, also driving the US Dollar higher on the day. Precious metals spiked recently due to a weak dollar, which Donald Trump has openly favoured. This high price triggered a wave of selling, led by Chinese investors jumping in to cash out and take their profits.

Market Leverage and Rapid Liquidations

Many experts had already expounded the theory that the metals market was due for a price correction, but financial commentators said that even the experts were taken by surprise as the correction was amazingly fast, exemplified by gold, which at one point dropped $200 in roughly ten minutes. At the beginning of the year, many analysts had warned that precious metals would face volatility in 2026, but little did they know it would appear so soon and with such rapidity. Analysts also advised that the gold and silver markets were highly leveraged, so when the selling began, the unwinding of the leveraged bets created a tsunami of selling, and liquidity disappeared.

Current Recovery and 2026 Outlook

As of today, both gold and silver have staged a significant recovery, with gold breaking through the psychological barrier of $5,000, hitting $5,084.99. Silver has recovered by over 5% to $90 per ounce, mainly due to those investors buying the dip. Silver also remains supported by strong industrial demand and structural supply deficits. Demand for haven assets has also rebounded after the US Military yesterday shot down an Iranian drone over the Arabian Sea. 

Experts suggest that both metals are expected to face volatility, and prices will continue to move upwards during 2026, but not at the pace of the recent bull rally. However, political uncertainties in the lead up to mid-term elections in November, plus the direction of interest rates under a Federal Reserve led by Kevin Warsh, may well cloud predictions in the coming months.

Update for Crude Oil Prices

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Current Market Performance vs. Predictions

In December 2025, many experts, commentators and analysts predicted that there would be an oversupply of crude oil in 2026, resulting in an oil glut caused by an increasing supply and weaker demand. Analysts suggested that the price of Brent Crude will average $58 bbl. At the time of writing, Brent crude futures traded up to $70 per bbl. for the first time since September 2025. Geopolitical tensions have helped bolster prices, with the global oil benchmark* rising by around 2.75%, while its US counterpart, West Texas Intermediate, climbed to just over $65 per barrel.

*Key Global Oil Benchmarks – The primary benchmarks are Brent Crude (North Sea), which covers 80% of global traded volume and West Texas Intermediate (WTI) (US), which is a key benchmark for the Americas. Dubai Crude is also used as a benchmark for Middle Eastern oil sent to Asia.

Impact of Geopolitical Escalations

The recent rise in crude oil prices has mostly been attributed to President Donald Trump, who threatened Iran with military action unless they agree to a nuclear arms agreement. Experts suggest that the threat issued via President Trump’s social media (Truth Social) yesterday evening, where he said that US ships had been ordered to the region and were ready to ”fulfil their mission with speed and violence, if necessary”, is responsible for the escalation in geopolitical premium of oil priced by potentially $3.00 – $4.00 per bbl.

Supply Disruptions and Global Conflict

Beyond the impact of geopolitical tensions on crude oil prices, the recent rise has also been driven by major supply disruptions in Kazakhstan. Prices were further supported last Friday after President Putin dampened hopes of a long-term settlement in the war with Ukraine. Experts advise that, despite the oversupply and lower prices that were predicted for this year, oil prices are expected to remain elevated for the time being as the markets wait for the next move by the White House and Iran. Analysts have reported that Tehran have stepped up negotiations with its OPEC+* counterparts and key Middle Eastern countries in an effort to stave off American aggression.

*OPEC+ – is short for the Organisation of the Petroleum Exporting Nations and is a coalition of 23 oil-producing countries, of which the full members are Algeria, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of the Congo, Saudi Arabia, United Arab Emirates and Venezuela. There are a further 10 non-OPEC Partner Countries that form the OPEC+ and make up the DoC (Declaration of Cooperation), consisting of Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan. The whole group’s modus operandi is to cooperate to influence the global oil market and stabilise prices.

Short-Term Outlook and Future Risks 

Experts advise that in the short-term (the next 4 to 6 weeks), based on technicals, the price of Brent Crude is estimated to trade within a range of $60 – 70 per bbl, with any movement being driven by geopolitical or inventory headlines. Despite a mid-range of analysts’ assessments of 2 – 3 million bbl per day, it is expected that today’s prices of crude oil will remain at the current level. Today, however, Iran has threatened to close the Straits of Hormuz, and analysts advise that this will definitely spike the price of oil and will no doubt, according to political and military experts, lead to military intervention from the United States.

The Federal Reserve Holds Interest Rates Steady

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FOMC Holds Interest Rates Steady

Today, and for the first time since July 2025, the Federal Reserve’s FOMC (Federal Open Market Committee) kept interest rates steady between 3.50% and 3.75%. The FOMC voted 10 – 2 in favour of holding rates steady, with the two dissents coming from Governor Waller (a President Trump nominee to replace Fed Chair Powell) and Governor Miran*, both voting for a cut in interest rates of 25 basis points. Post-meeting statements by officials said, “job gains have remained low, and the unemployment rate has shown some signs of stabilisation”. Interestingly, the language that officials used in three previous statements suggested that there were increased downside risks to employment, has disappeared this time around.

Background on Governor Miran

*Federal Reserve Governor Marin – In December 2024, President Donald Trump named Miran as his nominee for chair of the Council of Economic Advisors. He was confirmed by the United States Senate in March 2025. Governor Marin developed the Trump administration’s Tariff Policy, opining that import taxes are not inflationary.

Powell Signals Improving Economic Outlook

After the interest rate announcement, Federal Reserve Chairman Jerome Powell said, “The outlook for economic activity has improved, clearly improved since the last meeting, and that should matter for labour demand and for employment over time”. Recently released data backed up this statement, showing steady employment, accelerating growth, and cooling inflation”. On the growth front, official data released last week for GDP showed an annualised growth of 4.4% for Q3 2025, with some experts suggesting it could reach 5.4% in Q4. 

Political Pressure and Inflation Concerns

Chairman Powell has also noted, “The economy has once again surprised us with its strength, not for the first time.” However, once again, President Trump has hurled insults at Chairman Powell, calling him a moron for not lowering interest rates. The President’s frustration is likely to grow, as experts say Chairman Powell’s comments clearly suggest the FOMC plans to keep interest rates on hold in the coming months. Indeed, the Federal Reserve’s Personal Consumption Expenditures Inflation Gauge, (their preferred inflation gauge),  reflected 2.8% in November 2025 which is nearly a full percentage point above their 2% target, so as some analysts have suggested, this may be another reason to keep rates on hold as the Federal reserve attempt to balance their dual mandate of full employment and price stability.

Market Reaction and What Comes Next

Analysts advise that the reaction by financial markets to the Federal Reserve’s interest rate decision was relatively muted, with traders pricing in two more rate cuts this year, the first cut being expected in June. Indeed, analysts suggest that the statement by officials following the rate decision was on the hawkish side, especially as downside risk to employment was removed from the language and economic activity was reclassified from moderate to solid. This suggests that Chairman Powell may well have presided over his last interest rate cut as he is due to retire on 15th May this year. Global markets are watching with cautious anticipation as President Trump prepares to appoint a rate-cut advocate as the next Chairman of the Federal Reserve. The two dissenters in today’s announcement are Trump appointees, and both Fed Governors are in the frame for selection.

Forecast Update for Gold, Silver, Platinum and Palladium

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Analysts advise that in 2026, precious metals will hit new highs on the back of a strong 2025, but at the same time expect them to face several growing challenges as perceived risks collide with momentum, creating the setting for potential volatility.  Experts within the precious metals arena see gold, silver, platinum and palladium enjoying another breakout year, with some analysts advising the current consensus suggests gold could go as high as $6,500 – $7,000, whilst silver could hit the $160-mark, platinum could be seen at $3,000, with palladium not far behind.

Gold

Gold enjoyed a record-breaking bull run in 2025, with some analysts now expecting the yellow metal to average 38% above 2025 levels. These expectations are driven by continued Federal Reserve rate cuts and ongoing central bank purchases, as countries — particularly BRICS* nations — seek to diversify away from the US dollar. Further expectations suggest that gold’s safe haven status will be considerably enhanced as it is expected that the geopolitical tensions will continue into 2026, whilst global economic uncertainty will also be a driver of gold.

Bearish sentiment suggests that there are cracks in the bulls’ outlook, as currently the market is experiencing a retreat in jewellery demand*, plus central banks appear to be somewhat price sensitive. Price range across the board for 2026 differs from analyst to analyst, with average gains predicted at $4,741.97 across the year and a trading range from $3,450 – $7,150. However, as of today, gold broke another record, going through the $5,000 barrier for the first time, hitting $5,094oz, giving a pat on the back to the bulls.

*BRICS – An intergovernmental agency and an acronym for Brazil, Russia, India, China (all joined in 2009), followed by South Africa in 2010 as the original participants. Today, membership has grown to include Iran, Egypt, Ethiopia, and the United Arab Emirates and Saudi Arabia, with Thailand and Malaysia on the cusp of joining. Russia sees BRICS as continuing its fight against Western sanctions, and China (through BRICS) is increasing its influence throughout Africa and wants to be the voice of the “Global South”. Several commentators feel that as the years progress, BRICS will become an economic and geopolitical powerhouse and will represent a direct threat to the G7 group of nations. Currently, this group represents 44% of the world’s crude oil production, and the combined economies are worth in excess of $28.5 trillion, equivalent to 28% of the global economy.

**Jewellery Purchases – In China, the high price of gold has seen a decline in the volume of physical jewellery purchases, with January imports via Hong Kong down 40% month-on-month. A similar situation is being faced in India, where analysts are projecting a 20% contraction in gold jewellery volume again due to high prices and weak consumer demand, which is moving away from traditional heavy jewellery to lighter and more affordable designs. India and China are the world’s largest consumers of gold jewellery, together accounting for over 55% of global demand.

Silver

The metal enjoyed an outstanding 2025 with prices increasing in excess of 100%, entering 2026 with the previous year’s industrial momentum on its back. Many analysts predicted that silver would reach $100+ per ounce in 2026, and this milestone was achieved on Friday, 23rd January, when prices rose 6.9% to $102.87 — pushing year-to-date gains to over 40%.

Like gold, silver is also viewed as a haven, and the rise in silver was fuelled by failure to reach an agreement for a deal to end the Russian/Ukraine war, plus the breakdown in European USA relations. Experts also suggested that the White House’s continued attack on the independence of the Federal Reserve has also helped to push the price of silver on an upward trajectory.

Some analysts forecast silver could climb as high as $165 per ounce, with bullish market sentiment driven by structural supply deficits, rising industrial demand from solar panels and EVs, strong retail buying, particularly in China, and increased investment inflows. Safe haven appetites will continue to increase, especially as upward momentum is also fanned by what is known as “the debasement trade”*. Recently, silver hit another high of $113.22oz, another record and another pat on the back for the bulls.

*The Debasement Trade – A financial strategy where investors divest themselves of fiat currencies and sovereign bonds, and invest in hard assets such as precious metals, e.g., gold and silver. Key takeaways are rising sovereign or government debt, geopolitical instability, and inflation. Experts advise that investors have been selling major currencies and running to alternative assets such as gold (both physical and ETF), silver, Bitcoin, and even some collectables such as Pokémon cards, which recently reached an all-time high.

Debasement trading, say many commentators, will continue on an upper curve in 2026 with Europe having to deal with France and other issues. Japan has unsettled markets with the appointment of a new pro-stimulus, tax-cutting Prime Minister, raising concerns about further debt increases. In the UK, the Chancellor is preparing a budget many commentators see as potentially explosive. Meanwhile, the United States is grappling with an already unsustainable debt burden, as the President intervenes in Venezuela, clashes with both allies and adversaries, and attempts to exert influence over the Federal Reserve.

Platinum

The bull analysts are back in town for PGMs*, and suggestions are that platinum will reach $2,450/oz in 2026 due to acute market tightness. However, as at 14.20 GMT on the 23rd of January, platinum was sitting at $2,820, reflecting how investors are fleeing to safe-haven hard assets. Market deficits have helped underwrite the increase in the price of platinum, with market deficits predicted to be between 329,000oz and 460,000oz. Industrial demand is a key driver of price, especially in the areas of auto catalysts,  with the slower EVs (electric vehicles) and the rising demand for hydrogen-related technologies (PEM – Proton Electric Membrane fuel cells and electrolysers). The automotive industry accounts for circa 30 – 45% of global annual demand.

*PGMs – In the metal markets, most commonly known as Platinum Group Metals, are a group of six noble precious metallic elements, being Platinum, Palladium, Rhodium, Ruthenium, Iridium, and Osmium. Typically, they are highly resistant to wear and tear and tarnish, making platinum particularly suited for up-market jewellery. PGMs are used across many industries plus can be found in anti-cancer drugs, electronics, dentistry and vehicle exhaust catalysts (VECs).

Palladium 

The sentiment for palladium from many analysts appears to be on the bullish side, with many seeing the metal breaking higher this year, which reflects a physically tight market plus continued demand for hybrid vehicle catalysts. On the bear side, prices differed substantially, with the average forecast of $1,400oz with a trading range of $1,100oz – $2,100oz. On the bull side, the average forecast is $2.300oz with a trading range of $1,100 – $2,900oz. However, as of 15.44 GMT on January 23rd, the bid-ask spread was $2,112/2,152 per ounce, showing that, like other metals, the price has been on an upward path compared to some predictions, although palladium did hit a high of $2,155oz.

The late surge this month of gold, silver and PGMs has been driven by structural deficits and expectations of the US. The Federal Reserve is dropping interest rates due to intense geopolitical tensions. Safe-Haven demand has increased mainly due to U.S. military posturing near Iran, and President Trump’s threatened military attack on Greenland (on which he peddled back), culminating in a breakdown in relations with America’s European allies, plus threatening further tariffs on his allies but not his enemies.

There has been a shift away from US assets as investors rotate capital away from bonds and equities and the U.S. dollar, which fell to its lowest against the Euro since September 2021 at EUR/USD 1.19 and a four-month low against sterling at $1.37. Analysts have also advised that further central bank buying of gold this week has also acted as a price driver for the yellow metal, and even though recent rallies are unprecedented, the gold and silver markets are liable for a series of sharp corrections to the downside, excluding any profit taking, which will also soften prices.

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