Market Check – Risk-sentiment sours further, Gold (XAU/USD) explodes

[Ben Graham]

EU–US tensions are worsening, with the EU now pushing to suspend the tariff deal agreed upon in July, further clouding the political atmosphere.

US President Trump is currently addressing the public to celebrate “365 Days, 365 Wins,” highlighting what he frames as his key achievements over the past year as he marks the first anniversary of his second term.

He is, unsurprisingly, showcasing the strongest anecdotes from his perspective.

However, such addresses are unlikely to sit well with several EU leaders, especially amid growing pushback against the President’s recent rhetoric regarding Greenland.

The FX pair to watch to monitor how serious current discussions get is USD/CHF, situated at the perfect intercept between European issues, safe-haven demand and dedollarization trends – Down 1.90% since Friday!

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USD/CHF 2H Chart – January 20, 2026 – Source: TradingView

Get access to our latest analysis of the currency pair right here!

While this morning’s appearance by Treasury Secretary Scott Bessent briefly eased the tone — urging everyone to “take a deep breath and let things play out” — markets did not take comfort for long.

Read More: Stocks rebound, is it TACO Tuesday? – Dow Jones and US Stock Index Outlook

Gold had already gapped higher in yesterday’s session and continued to extend gains as US traders returned from the Martin Luther King Day holiday, now pushing toward $4,760. Silver and other metals are following suit, printing fresh highs.

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XAU/USD (Gold) 2H Chart – January 20, 2026 – Source: TradingView

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A look at the daily performance in Commodities, January 20, 2026 – Source: TradingView. XAG = Silver, XAU = Gold, XCU = Copper, XPT = Platinum, XPD = Palladium

Equities, on the other hand, tell a very different story. Stock indices bounced early in the session but topped quickly and failed to recover. The Dow Jones is now down 1.80%, while both the Nasdaq and S&P 500 are lower by around 2%.

The key question now shifts to US Treasuries, which are facing renewed selling pressure as European banks and funds consider further diversification away from the US dollar.

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Dollar Index (DXY) 2H Chart, January 20, 2026 – Source: TradingView

The weaponization of foreign-owned assets has set a precedent — as seen with Russian assets in Europe and the US — and remains a growing concern for investors as Global leaders call out the New World Order and the World Economy Conference is ongoing.

Safe Trades!

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