January was shaped by geopolitics and political commentary rather than economic data. Gold and silver rose strongly early in the month before falling back toward the end. The UK stock market reached a new high, while US technology stocks lost momentum as investors grew more cautious about artificial intelligence spending and earnings growth.
If January needed a headline moment, President Trump was happy to provide one. Early in the month he detained the president of Venezuela and revived the idea of bringing Greenland under US control. Both moves unsettled markets and underlined the point that geopolitical risk remains a constant presence for investors.
The annual gathering of political and business leaders in Davos also took place. While the event followed its familiar routine of speeches and set-piece meetings, President Trump once again drew plenty of attention. He spoke positively about the strength of the US economy, criticised Europe’s regulatory and energy priorities, and reinforced an America-first approach to trade and geopolitics. There was also a brief mix-up between Greenland and Iceland, an easy mistake perhaps, but one best avoided.
Against this backdrop, gold and silver extended an already strong run through much of the month as investors looked for assets that tend to hold their value in uncertain times. Both metals then fell sharply toward month end as profits were taken. In the UK, the main stock market passed the 10,000 mark for the first time, driven by mining, energy stocks and banks rather than technology. Oil prices rose earlier in the month on concerns over Iran and potential supply disruption, before easing back later. In the US, technology stocks came under pressure after Microsoft suffered one of its sharpest one-day falls following earnings, reviving questions about how quickly heavy AI investment will translate into profits.
Bottom Line
Market leadership appears to be shifting. This is a timely reminder of the importance of diversification, not just across asset classes, but also by style, sector and geography.
Q&A
How have escalating tensions involving Iran impacted oil prices?
The year began with rising geopolitical tension as relations between Iran and the US deteriorated. President Trump’s rhetoric hardened over the month, moving from criticism of Iran’s domestic actions to explicit threats of military intervention, including the deployment of a large naval force to the Middle East.
These developments initially pushed oil prices higher as markets focused on the risk of supply disruption. Iran is a major global oil producer, and any escalation could also threaten shipping through the Strait of Hormuz, which handles around 20 percent of global oil shipments. Toward month end, prices eased as signs of renewed diplomatic engagement emerged. While talks are now under way, a lasting resolution still appears some distance off.
Who is the new Fed chair Kevin Warsh, and what could we expect?
Markets ended January on a more settled note following reports that Kevin Warsh will succeed Jerome Powell as Chair of the Federal Reserve when Powell’s term ends in May 2026. The appointment followed months of speculation and debate about the future direction and independence of the US central bank.
Warsh brings strong credentials. He began his career in investment banking, later served at the National Economic Council, and went on to join the Federal Reserve Board during the global financial crisis. He is generally seen as focused on keeping inflation under control, with markets expecting a disciplined, data-driven approach to interest rates and potentially fewer or more cautious rate cuts than previously anticipated.
What has been happening in gold and silver?
Gold and silver dominated headlines after reaching all-time highs late in January. Demand has been supported by heightened geopolitical uncertainty, with central banks leading recent buying as they diversify away from the US dollar. Investor inflows into both metals have also remained strong.
Silver has benefited from similar forces, alongside solid industrial demand linked to electronics and renewable technologies and constrained supply. After such a strong rally, prices fell sharply toward month end as investors took profits, marking one of the more notable short-term pullbacks in recent years.
Month by Numbers
As at 31 January 2026
Equities
- UK: +3.07%
- Europe: +2.91%
- US: +1.27%
- Emerging Markets: +8.78%
- Japan: +4.90%
Bonds / Rates (absolute change)
- UK Base Rate: 0.00% (3.75%)
- Fed Funds Rate: 0.00% (3.75%)
- UK 10-Year Yield: +0.05% (4.52%)
- US 10-Year Yield: +0.10% (4.26%)
Currencies
- GBP / USD: +2.00% ($1.37)
- GBP / EUR: +0.72% (€1.15)
- DXY (USD Index): -1.35% (96.99)
Commodities
- Gold: +12.75% ($4,865.35)
- Oil (Brent): +16.17% ($70.69)
Noteworthy
- Cocoa: -31.30%