Gold prices recover
At a glance: Gold prices recovered on Tuesday after posting losses in the previous session.
Details: Gold prices recorded their biggest drop since December 18 on Monday, following the launch of China's low-cost artificial intelligence model “DeepSeek”.
Uncertainty over US President Donald Trump's proposed tariffs also supported the safe-haven metal yesterday.
Why it matters: Traders stopped trading their assets on Monday and sold them to cover their margins in light of the news of DeepSeek's big success.
Traders flocked to safe-haven assets on Tuesday amid uncertainty over the impact of DeepSeek's popularity on major US tech companies.
Gold prices were also positively affected by US President Donald Trump's comments about imposing tariffs on imported computer chips, steel, aluminum, copper, and pharmaceuticals in an effort to boost domestic production. Trump's proposed policies could be inflationary and trigger trade wars.
The yellow metal is expected to reach a record high this year due to growing economic and inflationary concerns. Investors assessed the latest economic data from the United States, which showed that new orders for manufactured durable goods fell 2.2% to $276.1 billion in December, following a 2% contraction in November.
The dollar's rising momentum weighed on gold prices on Tuesday, as it made the metal more expensive for foreign currency holders. The U.S. dollar index rose 0.5% to 107.87 on Tuesday.
Moreover, US gold futures rose more than 1% to close at $2,767.50 per ounce yesterday.
In other metals trading, silver futures rose sharply to $30.882 per ounce, and copper rose to $4.2465. Platinum fell to $959.4, and palladium dropped nearly 1% to $963.60.
What to watch: Investors await the US Federal Reserve's first policy decision of 2025 today (2300 UAE time), with markets expecting policymakers to keep interest rates unchanged. Markets will also watch for any signs of what the central bank intends to do this year after Trump signaled his desire to cut interest rates.
General Motors will be in the spotlight today
after the release of its fourth-quarter results.
Synopsis: Shares of General Motors fell sharply on Tuesday despite the company reporting better-than-expected quarterly results.
Details: General Motors reported an unexpected net loss for the latest quarter, incurring billions in special charges due to recent changes in its business plans.
The auto giant reported adjusted earnings of $1.92 per share, beating analysts' estimates of $1.86 per share. Quarterly sales rose 11% to $47.70 billion, beating Wall Street's expectations of $43.61 billion.
The company's cash flow from operations (year-over-year) grew 1.6% year-over-year to $4.765 billion, while net income declined by more than $5 billion due to one-time charges, which included non-cash restructuring charges and a $4 billion impairment of Chinese joint ventures.
Management also projected adjusted earnings of $11 to $12 per share for fiscal 2025, higher than the market estimate of $10.84 per share. It said its projections are based on the assumption of a “stable political environment” in North America. The company also forecast automotive operating cash flow in the range of $21 billion to $24 billion.
How stocks responded: Shares of General Motors fell 8.9% to close at $50.04 yesterday following the release of quarterly results. The stock is up about 41% over the past year.
What to watch: Investors will continue to monitor the company's overall auto sales, which are expected to significantly impact overall results going forward. Trump's proposed tariffs and policies will also remain in the spotlight.
Other markets: European indices closed higher on Tuesday, with the FTSE 100, DAX 40 and STOXX Europe 600 up 0.35%, 0.70% and 0.36%, respectively, while the CAC 40 fell 0.12%.
Other important news
Russian President Vladimir Putin stated that he is open to peace talks but will not speak directly to Ukrainian President Volodymyr Zelensky. The news sent the RUB/USD pair slightly higher in this morning's forex trading session.
Australia's monthly Consumer Price Index rose 2.5% year-on-year in December, accelerating from 2.3% in November, sending the AUD/USD pair lower in forex trading this morning.
US crude oil inventories grew by 2.86 million barrels in the week ended January 28, compared to a gain of 1 million barrels in the previous week, sending WTI prices lower this morning.
Today's economic releases are
GDP growth rate (1200 UAE time) in Spain, corporate loans (1300 UAE time), household loans (1300 UAE time), M3 money supply (1300 UAE time) in the Eurozone, business confidence (1300 UAE time) and consumer confidence (1300 UAE time) in Italy, MBA mortgage applications (1600 UAE time), merchandise trade balance (1730 UAE time), retail inventories (1730 UAE time), wholesale inventories (1730 UAE time), crude oil inventories (1930 UAE time), gasoline inventories (1930 UAE time), goods trade balance (1730 UAE time), retail inventories (1730 UAE time), wholesale inventories (1730 UAE time), crude oil inventories report (1930 UAE time), gasoline inventories report (1930 UAE time) and distillate inventories report (1930 UAE time) from the US Energy Information Administration, Bank of Canada interest rate decision (1845 UAE time) in Canada and producer price report (2000 UAE time) in Russia.
Gold prices recover from the impact of DeepSeek
Details: Gold prices recorded their biggest drop since December 18 on Monday, following the launch of China's low-cost artificial intelligence model “DeepSeek”.