EMEA Morning Briefing: Gold, Silver Rebound

European stock futures pointed higher early Tuesday, tracking gains in Asia. Risk sentiment improved following Wall Street’s advance, while the U.S. dollar softened slightly, Treasury yields were steady, oil eased, and gold futures firmed.

Equities

European bourses look set to open stronger as a risk-on tone persists after a robust U.S. manufacturing reading highlighted resilience in the world’s largest economy. Investors also cited optimism around trade developments and diplomatic efforts in the Middle East.

Gold and silver rebounded as broader risk appetite improved, buoyed by indications the U.S. will reduce tariffs on India to 18% and by reported plans for U.S. and Iranian officials to meet in Turkey later this week to help contain regional tensions.

Markets continue to digest the potential shift at the Federal Reserve, with Kevin Warsh expected to replace Jerome Powell when Powell’s term ends this spring. Some strategists suggest traders haven’t settled on whether Warsh would be hawkish or dovish, and there is debate about how policy autonomy and the balance of risks might evolve under new leadership.

Foreign Exchange

The dollar ticked lower amid improved risk sentiment and hopes for a smoother U.S.-India trade relationship. Strategists note that currency moves reflect a fluid mix of economics, politics, positioning, and policy. While sentiment toward the dollar has cooled, analysts caution against becoming overly bearish given shifting drivers and the potential for abrupt turns.

Bonds

Euro-denominated bank debt supply is expected to pick up as lenders exit earnings blackout periods that temporarily restricted new issuance. With primary market conditions still constructive and bank balance sheets broadly healthy, strategists anticipate steady investor demand for euro bank paper in the near term.

Energy

Oil edged lower but may find support from anticipated changes to U.S.-India trade arrangements. Market participants noted remarks indicating additional tariffs imposed on India could be removed, potentially encouraging Indian refiners to increase purchases from the U.S. and other suppliers. Price action remains sensitive to geopolitical headlines and the demand outlook.

Metals

Gold advanced on a technical rebound, with dip-buying emerging after the recent pullback. Some analysts said the underlying investment case remains intact, though momentum has cooled and positioning may need to reset.

Copper firmed as Chinese manufacturers reportedly stepped in to restock ahead of the Lunar New Year, taking advantage of recent price dips. Iron ore eased amid a seasonal demand lull, though steel mill restocking and a recovery in pig iron output are seen cushioning the downside.

Policy and Corporate Roundup

• U.S.-India Tariffs and Trade: Market sentiment was supported by indications that the U.S. will reduce tariffs on India to 18%. India is expected to shift crude purchases toward the U.S. and potentially other Western Hemisphere suppliers.
• U.S. Manufacturing: Reports point to continued softness in U.S. manufacturing employment, with the sector shedding roles in recent months despite policy efforts. Tariff measures and higher input costs have complicated the outlook.
• U.S. Data Delay: The January jobs report has been delayed due to a partial federal government shutdown. A new release date will be set once funding resumes.
• EU Raw Materials: EU auditors warned of vulnerabilities in critical raw-material supply chains for batteries, solar, defense, and aerospace, urging better tracking and diversification to reduce dependency.
• Tech and AI: Space sector and AI headlines drew attention after reports of a tie-up involving SpaceX and xAI. Meanwhile, uncertainty around the scale of investment between major AI and chip players has raised questions about the implications for large cloud and infrastructure contracts, including those tied to AI workloads.

Day Ahead

• Euro area: January EuroCOIN indicator of economic activity
• Denmark: January foreign exchange and liquidity data

Overall, the session opens with a modest risk-on tone: European equities are poised for gains, the dollar is softer, safe havens like gold and silver are stabilizing, and credit markets remain supported. Traders will watch incoming data, central bank commentary, and trade developments for confirmation of the improved mood.