February 5th Financial Breakfast: A stronger US dollar limited gold price gains; non-farm payrolls data was postponed this week; US-Iran nuclear negotiations drove oil prices higher.
2026-02-05 07:24:22
On Thursday (February 5, Beijing time) in early Asian trading, spot gold was trading around $5,004 per ounce. Gold prices rose and then fell on Wednesday, influenced by both a stronger dollar index to near a one-week high and profit-taking by investors after the recent record rally. US crude oil was trading around $64.33 per barrel. Oil prices rose on Wednesday, mainly driven by news related to the US-Iran nuclear negotiations.
Bank of England Governor Bailey held a press conference on monetary policy; European Central Bank President Lagarde held a press conference on monetary policy; Atlanta Fed President Bostic participated in a dialogue on monetary policy.
U.S. stocks closed mixed on Wednesday, with concerns about overvaluation of artificial intelligence (AI) stocks weighing on the technology sector. The S&P 500 fell 0.51% to 6,882.72, while the Nasdaq Composite dropped sharply by 1.51% to 22,904.58. In contrast, the Dow Jones Industrial Average rose 0.53% to 49,501.30.
Shares of chipmaker AMD plunged 17% after disappointing revenue forecasts fueled investor concerns about its ability to compete with Nvidia in the AI field. Nvidia shares also fell 3.4%, and the Philadelphia Semiconductor Index dropped 4.4%. Artificial intelligence data company Palantir plunged nearly 12%, erasing gains from the previous trading day. Other software companies such as Snowflake and Datadog also continued their declines. Market analysts believe that uncertainty surrounding the scale of investment in AI infrastructure and the speed of tool adoption has triggered market skepticism and a sell-off in related stocks due to overvaluation concerns.
Against this backdrop, funds rotated, with investors turning to sectors with relatively lower prices and smaller gains in recent years. The S&P 500 Value Index rose for the fifth consecutive day, while the Growth Index fell. Despite the broader market closing lower, seven of the 11 sectors in the S&P 500 rose, with the energy sector surging 2.25% and the materials sector gaining 1.8%.
In individual stocks, Alphabet, Google's parent company, fell nearly 2% before its earnings release after hours, but rebounded after hours after announcing a significant increase in AI investment. Pharmaceutical giant Eli Lilly's shares jumped about 10% as its 2026 profit forecast exceeded expectations, helping to limit the S&P 500's decline. Advanced Micro Devices (AMD) surged 13.8% after raising its full-year revenue forecast.
Market trading was relatively active, with a total turnover of 24.6 billion shares. On the economic data front, US private sector employment growth in January was lower than expected. The January non-farm payroll report, originally scheduled for release on Friday, was postponed due to the partial government shutdown.
Gold prices rallied and then retreated on Wednesday, with spot gold ultimately closing down 0.3% at $4,924.89 per ounce, after rising more than 3% at one point during the session. This pullback was mainly driven by a strengthening dollar index near a one-week high and profit-taking by investors following the recent record rally.
Market analysts point out that the rebound in the US dollar has increased the cost of dollar-denominated gold for international buyers, putting direct pressure on prices. David Meger, director of metals trading at High Ridge Futures, said the market is still in a profit-taking phase after hitting record highs, and the consolidation process is "not quite over yet."
On the geopolitical front, despite a series of important diplomatic interactions that day, including the upcoming talks between the US and Iran and phone calls between leaders of major countries, these events did not provide sustained safe-haven support for gold prices, indicating that the market is reassessing the geopolitical risk premium.
On the economic data front, the US ADP private sector job growth for January, released that day, was only 22,000, far below the market expectation of 48,000, providing an early signal of a potential slowdown in the US labor market. However, the more authoritative US non-farm payroll report for January was postponed to February 11 due to the government shutdown. The absence of this key data left the market in a wait-and-see mode, awaiting clearer guidance on the economic policy path.
Other precious metals showed mixed performance: spot silver rose 1.3% to $86.08 per ounce, although it has retreated significantly from its record high last week, it is still up more than 20% year-to-date, indicating that its volatility is significantly higher than that of gold. Platinum and palladium also recorded slight gains.
Oil prices rose on Wednesday, driven primarily by news related to the US-Iran nuclear negotiations. Brent crude futures settled at $69.46 a barrel, while WTI crude futures settled at $65.14 a barrel.
Oil prices fluctuated wildly throughout the day. Initially, media reports that the scheduled US-Iran talks on Friday might fall through boosted geopolitical risk premiums. Subsequently, a US official confirmed that the US-Iran nuclear negotiations would still proceed as planned in Oman on Friday. Continued market concerns about potential disruptions to oil transport through the Strait of Hormuz were a key factor supporting oil prices above fundamental levels. Analysts pointed out that if the situation escalates, not only will Iran's own crude oil supply be at risk, but its control over this crucial waterway will also threaten global oil flows.
On the fundamental data front, the U.S. Energy Information Administration showed that crude oil inventories fell by 3.5 million barrels last week, exceeding analysts' expectations but less than the decline previously reported by the API (American Petroleum Institute), which limited further upside potential for oil prices. Meanwhile, India's crude oil imports from Russia continued to decline in January.
The dollar rose against the yen on Wednesday, after the yen fell for the fourth consecutive trading day. Japan is about to hold a general election, and the outcome is expected to favor Prime Minister Sanae Takaichi in pushing forward her fiscal and defense spending plans. Meanwhile, the dollar also strengthened slightly against most major currencies, including the euro and the pound.
The Institute for Supply Management (ISM) reported that the service sector remained stable in January, but rising input costs could signal a rebound in recently slowing service sector inflation. This data was closely watched by markets as the partial U.S. government shutdown (which ended Tuesday night) delayed key employment data originally scheduled for Friday until next week, exacerbating market uncertainty regarding the Federal Reserve's interest rate path.
Steve Englander, Global Head of G10 FX Research at Standard Chartered Bank, pointed out that the US dollar is currently still trapped in its recent range, and traders are assessing whether the stock market decline led by technology stocks is a typical case of risk aversion (which usually supports the dollar) or whether it means that the core sector of the US economy, the technology industry, is deteriorating.
The yen fell 0.7% against the dollar to 156.82 in late New York trading, after hitting its lowest level since January 23. Since January 30, the yen has fallen by more than 2%. Earlier, Prime Minister Sanae Takaichi's campaign speech touting the benefits of a weaker yen triggered a sell-off. Although she subsequently retracted her remarks, markets remain concerned that the contradictory signals she sent could undermine efforts to support the yen.
According to Joel Kruger, market strategist at LMAX Group, the market is being driven by three factors: Japanese election risks, cooling inflation in the Eurozone, and renewed focus on US growth and employment momentum. The dollar is receiving modest support, while the yen is noticeably weaker. Market focus is entirely on how economic activity and employment data will guide the future outlook.
The US dollar index rose 0.24% to 97.63. The Australian dollar fell 0.37% to US$0.6996, after surging in the previous session following the Reserve Bank of Australia's interest rate hike.
The euro fell 0.11% against the dollar to $1.1806. Investors are closely watching whether the European Central Bank will address the potential impact of the euro's valuation on its policy path in its policy decision on Thursday. The euro rose to a four-and-a-half-year high of 1.2084 last week, and policymakers have expressed concern about its rapid appreciation, warning that it could drag down inflation, which is already below the 2% target.
Analysts point out that the recent euro-dollar exchange rate movement has been almost entirely driven by dollar sentiment, with interest rate differentials becoming secondary.
The Trump administration froze funding for a railroad tunnel project; two states filed lawsuits in federal court.
New York and New Jersey have filed a lawsuit in federal court against the Trump administration for freezing approximately $16 billion in federal funds for a railroad tunnel project, claiming the decision is illegal and politically retaliatory. (CCTV News)
Several Middle Eastern countries are urgently lobbying the United States to resume the US-Iran talks originally scheduled for June 6.
On February 4th local time, after several Middle Eastern leaders urgently lobbied the Trump administration to abandon its threat to withdraw from negotiations, the planned US-Iran nuclear talks, originally scheduled for February 6th, were resumed, with the talks to be held in Oman. The US had earlier rejected Iran's proposal to move the meeting venue from Istanbul, Turkey, to Oman. This stalemate has reportedly sparked concerns throughout the Middle East, with fears that Trump might resort to military action. At least nine countries in the region contacted the White House through top-level channels, strongly urging the US not to cancel the talks. One US official stated, "They asked us to continue the meeting and hear what Iran has to say. We have told the Arab countries that if they insist, we will hold the meeting. But we are very skeptical." Another US official stated that the Trump administration agreed to hold the meeting out of "respect" for US allies in the region, "and to continue seeking diplomatic avenues." (CCTV News)
Key Republican Senator Scott stated that Powell did not commit a crime during the hearings.
Republican Senator Tim Scott said Federal Reserve Chairman Jerome Powell did not commit a crime when answering questions at a congressional hearing last summer. “I think he made a serious error of judgment. He wasn’t prepared for that hearing. I don’t think he committed a crime at the hearing,” Scott said in an interview with Fox Business on Wednesday. At that June hearing, Scott bombarded Powell with questions about the $2.5 billion renovation project at the Fed headquarters. Since then, allies of President Donald Trump have accused Powell of lying in his testimony without providing evidence. Powell is currently under criminal investigation by the Justice Department, focusing on his answers at the congressional hearing. The Fed chairman said the investigation was actually driven by government frustration with interest rates.
Russian Foreign Ministry: Russia and the United States are no longer bound by any obligations under the New START Treaty.
The Russian Foreign Ministry issued a statement on the evening of September 4th, stating that on September 22, 2025, Russian President Vladimir Putin publicly proposed an initiative suggesting that Russia and the United States voluntarily abide by the corresponding arms quantity limits stipulated in the New START Treaty for at least one year after its expiration. However, Russia has so far received no formal response from the United States through bilateral channels. This means that Russia's ideas have been deliberately ignored. Under these circumstances, Russia believes that the parties to the New START Treaty are no longer bound by any obligations or reciprocal declarations related to the treaty and are, in principle, free to choose their subsequent steps.
The US, Japan, and the EU announced a strategic partnership in key mineral sectors.
The joint statement indicates that the United States and the European Union will sign a memorandum of understanding within the next 30 days to strengthen the security of critical mineral supply chains. The US and EU will identify and support projects in the mining, recycling, processing, and refining sectors. Trade initiatives may include coordinated trade policies, price floors, standards-based markets, price differential subsidies, or underwriting agreements.
US Secretary of State: Progress made in Russia-Ukraine negotiations, but the most intractable issues remain unresolved.
On February 4th local time, US Secretary of State Marco Rubio stated that peace talks between Ukraine and Russia have made some progress, but the remaining issues are the "most difficult part" and a breakthrough is unlikely in the short term. Rubio said that the Trump administration has made "significant progress" in pushing for Ukraine-Russia negotiations compared to the same period last year. He said that if you compare the list of unresolved issues at this time last year with the number of issues still pending, you can clearly see that the list has been "significantly shortened." However, Rubio also emphasized that although the number of unresolved issues has decreased, what remains are the most complex and difficult problems to handle.
my country's commodity price index hit a three-and-a-half-year high in January 2026.
The China Federation of Logistics and Purchasing (CFLP) released the January China Bulk Commodity Price Index today (January 5th). The index shows that business expectations remain optimistic, production activity continues to expand, and the bulk commodity price index has risen for nine consecutive months, reaching a new high in three and a half years. The January 2026 China Bulk Commodity Price Index was 125.3 points, a 6.3% increase month-on-month. Among the 50 key bulk commodities monitored by the CFLP, 33 saw month-on-month price increases in January. Lithium carbonate, refined tin, and refined nickel saw the largest increases, rising by 48.4%, 20.2%, and 19.5% respectively compared to the previous month. (CCTV)
The business climate index is 51.2%! The logistics business is expected to maintain an expansionary trend in January 2026.
The China Federation of Logistics and Purchasing released its January 2026 China Logistics Industry Prosperity Index today (January 5th), indicating that the logistics business continues to expand. The January China Logistics Industry Prosperity Index was 51.2%, with the total business volume index, new orders index, logistics service price index, fixed asset investment completion index, employment index, and business activity expectation index all above 50%, indicating expansion. (CCTV News)
Key Focus Today
Bank of England Governor Bailey held a press conference on monetary policy; European Central Bank President Lagarde held a press conference on monetary policy; Atlanta Fed President Bostic participated in a dialogue on monetary policy.
stock market
U.S. stocks closed mixed on Wednesday, with concerns about overvaluation of artificial intelligence (AI) stocks weighing on the technology sector. The S&P 500 fell 0.51% to 6,882.72, while the Nasdaq Composite dropped sharply by 1.51% to 22,904.58. In contrast, the Dow Jones Industrial Average rose 0.53% to 49,501.30.
Shares of chipmaker AMD plunged 17% after disappointing revenue forecasts fueled investor concerns about its ability to compete with Nvidia in the AI field. Nvidia shares also fell 3.4%, and the Philadelphia Semiconductor Index dropped 4.4%. Artificial intelligence data company Palantir plunged nearly 12%, erasing gains from the previous trading day. Other software companies such as Snowflake and Datadog also continued their declines. Market analysts believe that uncertainty surrounding the scale of investment in AI infrastructure and the speed of tool adoption has triggered market skepticism and a sell-off in related stocks due to overvaluation concerns.
Against this backdrop, funds rotated, with investors turning to sectors with relatively lower prices and smaller gains in recent years. The S&P 500 Value Index rose for the fifth consecutive day, while the Growth Index fell. Despite the broader market closing lower, seven of the 11 sectors in the S&P 500 rose, with the energy sector surging 2.25% and the materials sector gaining 1.8%.
In individual stocks, Alphabet, Google's parent company, fell nearly 2% before its earnings release after hours, but rebounded after hours after announcing a significant increase in AI investment. Pharmaceutical giant Eli Lilly's shares jumped about 10% as its 2026 profit forecast exceeded expectations, helping to limit the S&P 500's decline. Advanced Micro Devices (AMD) surged 13.8% after raising its full-year revenue forecast.
Market trading was relatively active, with a total turnover of 24.6 billion shares. On the economic data front, US private sector employment growth in January was lower than expected. The January non-farm payroll report, originally scheduled for release on Friday, was postponed due to the partial government shutdown.
Gold Market
Gold prices rallied and then retreated on Wednesday, with spot gold ultimately closing down 0.3% at $4,924.89 per ounce, after rising more than 3% at one point during the session. This pullback was mainly driven by a strengthening dollar index near a one-week high and profit-taking by investors following the recent record rally.
Market analysts point out that the rebound in the US dollar has increased the cost of dollar-denominated gold for international buyers, putting direct pressure on prices. David Meger, director of metals trading at High Ridge Futures, said the market is still in a profit-taking phase after hitting record highs, and the consolidation process is "not quite over yet."
On the geopolitical front, despite a series of important diplomatic interactions that day, including the upcoming talks between the US and Iran and phone calls between leaders of major countries, these events did not provide sustained safe-haven support for gold prices, indicating that the market is reassessing the geopolitical risk premium.
On the economic data front, the US ADP private sector job growth for January, released that day, was only 22,000, far below the market expectation of 48,000, providing an early signal of a potential slowdown in the US labor market. However, the more authoritative US non-farm payroll report for January was postponed to February 11 due to the government shutdown. The absence of this key data left the market in a wait-and-see mode, awaiting clearer guidance on the economic policy path.
Other precious metals showed mixed performance: spot silver rose 1.3% to $86.08 per ounce, although it has retreated significantly from its record high last week, it is still up more than 20% year-to-date, indicating that its volatility is significantly higher than that of gold. Platinum and palladium also recorded slight gains.
oil market
Oil prices rose on Wednesday, driven primarily by news related to the US-Iran nuclear negotiations. Brent crude futures settled at $69.46 a barrel, while WTI crude futures settled at $65.14 a barrel.
Oil prices fluctuated wildly throughout the day. Initially, media reports that the scheduled US-Iran talks on Friday might fall through boosted geopolitical risk premiums. Subsequently, a US official confirmed that the US-Iran nuclear negotiations would still proceed as planned in Oman on Friday. Continued market concerns about potential disruptions to oil transport through the Strait of Hormuz were a key factor supporting oil prices above fundamental levels. Analysts pointed out that if the situation escalates, not only will Iran's own crude oil supply be at risk, but its control over this crucial waterway will also threaten global oil flows.
On the fundamental data front, the U.S. Energy Information Administration showed that crude oil inventories fell by 3.5 million barrels last week, exceeding analysts' expectations but less than the decline previously reported by the API (American Petroleum Institute), which limited further upside potential for oil prices. Meanwhile, India's crude oil imports from Russia continued to decline in January.
Foreign exchange market
The dollar rose against the yen on Wednesday, after the yen fell for the fourth consecutive trading day. Japan is about to hold a general election, and the outcome is expected to favor Prime Minister Sanae Takaichi in pushing forward her fiscal and defense spending plans. Meanwhile, the dollar also strengthened slightly against most major currencies, including the euro and the pound.
The Institute for Supply Management (ISM) reported that the service sector remained stable in January, but rising input costs could signal a rebound in recently slowing service sector inflation. This data was closely watched by markets as the partial U.S. government shutdown (which ended Tuesday night) delayed key employment data originally scheduled for Friday until next week, exacerbating market uncertainty regarding the Federal Reserve's interest rate path.
Steve Englander, Global Head of G10 FX Research at Standard Chartered Bank, pointed out that the US dollar is currently still trapped in its recent range, and traders are assessing whether the stock market decline led by technology stocks is a typical case of risk aversion (which usually supports the dollar) or whether it means that the core sector of the US economy, the technology industry, is deteriorating.
The yen fell 0.7% against the dollar to 156.82 in late New York trading, after hitting its lowest level since January 23. Since January 30, the yen has fallen by more than 2%. Earlier, Prime Minister Sanae Takaichi's campaign speech touting the benefits of a weaker yen triggered a sell-off. Although she subsequently retracted her remarks, markets remain concerned that the contradictory signals she sent could undermine efforts to support the yen.
According to Joel Kruger, market strategist at LMAX Group, the market is being driven by three factors: Japanese election risks, cooling inflation in the Eurozone, and renewed focus on US growth and employment momentum. The dollar is receiving modest support, while the yen is noticeably weaker. Market focus is entirely on how economic activity and employment data will guide the future outlook.
The US dollar index rose 0.24% to 97.63. The Australian dollar fell 0.37% to US$0.6996, after surging in the previous session following the Reserve Bank of Australia's interest rate hike.
The euro fell 0.11% against the dollar to $1.1806. Investors are closely watching whether the European Central Bank will address the potential impact of the euro's valuation on its policy path in its policy decision on Thursday. The euro rose to a four-and-a-half-year high of 1.2084 last week, and policymakers have expressed concern about its rapid appreciation, warning that it could drag down inflation, which is already below the 2% target.
Analysts point out that the recent euro-dollar exchange rate movement has been almost entirely driven by dollar sentiment, with interest rate differentials becoming secondary.
International News
The Trump administration froze funding for a railroad tunnel project; two states filed lawsuits in federal court.
New York and New Jersey have filed a lawsuit in federal court against the Trump administration for freezing approximately $16 billion in federal funds for a railroad tunnel project, claiming the decision is illegal and politically retaliatory. (CCTV News)
Several Middle Eastern countries are urgently lobbying the United States to resume the US-Iran talks originally scheduled for June 6.
On February 4th local time, after several Middle Eastern leaders urgently lobbied the Trump administration to abandon its threat to withdraw from negotiations, the planned US-Iran nuclear talks, originally scheduled for February 6th, were resumed, with the talks to be held in Oman. The US had earlier rejected Iran's proposal to move the meeting venue from Istanbul, Turkey, to Oman. This stalemate has reportedly sparked concerns throughout the Middle East, with fears that Trump might resort to military action. At least nine countries in the region contacted the White House through top-level channels, strongly urging the US not to cancel the talks. One US official stated, "They asked us to continue the meeting and hear what Iran has to say. We have told the Arab countries that if they insist, we will hold the meeting. But we are very skeptical." Another US official stated that the Trump administration agreed to hold the meeting out of "respect" for US allies in the region, "and to continue seeking diplomatic avenues." (CCTV News)
Key Republican Senator Scott stated that Powell did not commit a crime during the hearings.
Republican Senator Tim Scott said Federal Reserve Chairman Jerome Powell did not commit a crime when answering questions at a congressional hearing last summer. “I think he made a serious error of judgment. He wasn’t prepared for that hearing. I don’t think he committed a crime at the hearing,” Scott said in an interview with Fox Business on Wednesday. At that June hearing, Scott bombarded Powell with questions about the $2.5 billion renovation project at the Fed headquarters. Since then, allies of President Donald Trump have accused Powell of lying in his testimony without providing evidence. Powell is currently under criminal investigation by the Justice Department, focusing on his answers at the congressional hearing. The Fed chairman said the investigation was actually driven by government frustration with interest rates.
Russian Foreign Ministry: Russia and the United States are no longer bound by any obligations under the New START Treaty.
The Russian Foreign Ministry issued a statement on the evening of September 4th, stating that on September 22, 2025, Russian President Vladimir Putin publicly proposed an initiative suggesting that Russia and the United States voluntarily abide by the corresponding arms quantity limits stipulated in the New START Treaty for at least one year after its expiration. However, Russia has so far received no formal response from the United States through bilateral channels. This means that Russia's ideas have been deliberately ignored. Under these circumstances, Russia believes that the parties to the New START Treaty are no longer bound by any obligations or reciprocal declarations related to the treaty and are, in principle, free to choose their subsequent steps.
The US, Japan, and the EU announced a strategic partnership in key mineral sectors.
The joint statement indicates that the United States and the European Union will sign a memorandum of understanding within the next 30 days to strengthen the security of critical mineral supply chains. The US and EU will identify and support projects in the mining, recycling, processing, and refining sectors. Trade initiatives may include coordinated trade policies, price floors, standards-based markets, price differential subsidies, or underwriting agreements.
US Secretary of State: Progress made in Russia-Ukraine negotiations, but the most intractable issues remain unresolved.
On February 4th local time, US Secretary of State Marco Rubio stated that peace talks between Ukraine and Russia have made some progress, but the remaining issues are the "most difficult part" and a breakthrough is unlikely in the short term. Rubio said that the Trump administration has made "significant progress" in pushing for Ukraine-Russia negotiations compared to the same period last year. He said that if you compare the list of unresolved issues at this time last year with the number of issues still pending, you can clearly see that the list has been "significantly shortened." However, Rubio also emphasized that although the number of unresolved issues has decreased, what remains are the most complex and difficult problems to handle.
Domestic News
my country's commodity price index hit a three-and-a-half-year high in January 2026.
The China Federation of Logistics and Purchasing (CFLP) released the January China Bulk Commodity Price Index today (January 5th). The index shows that business expectations remain optimistic, production activity continues to expand, and the bulk commodity price index has risen for nine consecutive months, reaching a new high in three and a half years. The January 2026 China Bulk Commodity Price Index was 125.3 points, a 6.3% increase month-on-month. Among the 50 key bulk commodities monitored by the CFLP, 33 saw month-on-month price increases in January. Lithium carbonate, refined tin, and refined nickel saw the largest increases, rising by 48.4%, 20.2%, and 19.5% respectively compared to the previous month. (CCTV)
The business climate index is 51.2%! The logistics business is expected to maintain an expansionary trend in January 2026.
The China Federation of Logistics and Purchasing released its January 2026 China Logistics Industry Prosperity Index today (January 5th), indicating that the logistics business continues to expand. The January China Logistics Industry Prosperity Index was 51.2%, with the total business volume index, new orders index, logistics service price index, fixed asset investment completion index, employment index, and business activity expectation index all above 50%, indicating expansion. (CCTV News)
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
