January 2026 ended with mixed results for the major global markets, marked by a series of geopolitical events—from the military operation in Venezuela to tensions over Greenland—which triggered abrupt market moves and elevated volatility. The rally in gold (+13% over the month) clearly reflected the geopolitical tensions that characterized the beginning of 2026.
In the United States, the S&P 500 closed January up 1.4%, the Nasdaq 100 gained 1.2%, and the Dow Jones rose 1.7%. In Europe, the Euro Stoxx 50 increased by 2.7% and the FTSE 100 by 2.9%, while the CAC 40 declined by 0.3%. Germany’s DAX gained 0.2%, while the Swiss SMI fell by 0.6%.
In Asia, markets closed in positive territory: the Nikkei 225 gained 5.9%, the Chinese CSI 300 rose 1.7%, and the Hang Seng advanced by 6.9%.
Gold continued its historic run, breaking through the psychological threshold of $5,000 per ounce for the first time and reaching a record high of $5,608. However, the month ended with a sharp correction: after peaking, gold fell by 8% to close at $4,894, still posting a strong monthly gain of 13.3%. Silver recorded a monthly increase of 18.9% to $85.20, but with even greater volatility, dropping from around $120 to $85 in the final days of the month.
In the currency market, the euro appreciated by 0.9% against the dollar, closing at 1.185. The Swiss franc strengthened by 2.5% versus the dollar to 0.773, while the Japanese yen weakened by 1.2% to 154.78.
The crypto sector experienced a mixed start to the year. Bitcoin underwent a 3.9% correction, closing at $87,647, while Ethereum recorded a more modest decline of 1.5%. Unlike gold, which reaffirmed its role as a consolidated safe-haven asset in periods of heightened uncertainty, cryptocurrencies showed greater vulnerability, behaving as opportunistic assets highly dependent on global liquidity conditions rather than acting as protection against systemic risks.
In the United States, the end of January was marked by the Federal Reserve’s decision at its January 27–28 meeting to keep the federal funds rate unchanged in the 3.50%–3.75% range. December macroeconomic data pointed to persistent inflation, with headline inflation at 2.7% and core inflation confirmed at 2.6%, still above the Fed’s 2% target. On the employment front, the labor market showed signs of cooling, with just 50,000 new jobs added in December.
During the January 28 press conference, Chair Powell emphasized that the current level of interest rates remains appropriate. Markets are pricing in the possibility of rate cuts over the course of 2026. The announced appointment of Kevin Warsh as the future Fed Chair, set to replace Powell, has further fueled expectations of a potentially more accommodative policy stance.
In Europe, the ECB did not hold any meetings in the final week of January, with the first meeting of 2026 scheduled for February 4–5. The last decision in December 2025 left interest rates unchanged at 2% for the fourth consecutive time. President Lagarde reiterated that the central bank is in a “good position,” with inflation and growth broadly balanced, signaling a cautious and data-dependent approach for 2026. Market consensus expects rates to remain stable for much of the year, with the ECB maintaining “maximum optionality” amid a highly uncertain environment.
The geopolitical landscape in January 2026 confirmed the persistence of tensions across multiple fronts. In Ukraine, the conflict continued without meaningful progress despite trilateral negotiations between Russia, Ukraine, and the United States held in Abu Dhabi. Total losses since the start of the war have reached approximately 1.8 million soldiers, including those killed, wounded, or missing. Russia has continued to systematically target civilian and energy infrastructure.
In Latin America, the US military operation in Venezuela on January 3 triggered a major international diplomatic crisis. President Maduro and his wife were captured and transferred to New York to face charges of narco-terrorism, while Russia, China, Iran, and several South American countries condemned the operation as a violation of international law.
A new source of tension also emerged between the United States and Europe over Greenland. President Trump reiterated US interest in acquiring the Arctic island from Denmark for strategic and security reasons. When eight European countries—Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland—deployed military contingents to Greenland for an exercise in support of Danish sovereignty, Trump announced the introduction of 10% tariffs on these countries starting February 1. The crisis was subsequently resolved in Davos, where Trump announced a framework agreement with NATO Secretary-General Rutte providing for cooperation on the “Golden Dome” defense system, mining rights, and the potential establishment of US military bases. The tariffs were subsequently lifted.
We are closing January 2026 with a neutral equity allocation, following a reduction from an overweight position at the end of 2025, and an overweight allocation to gold. On the fixed income side, we have slightly extended portfolio duration in US dollar–denominated portfolios, while maintaining a neutral stance in Europe. Liquidity has been brought back to neutral, preserving the operational flexibility required in the current market environment. From a sector perspective, we favor information technology, financials, and industrials, while geographically we maintain a neutral allocation across regions.
The month was marked by frequent shifts in market direction and significant volatility. Markets are monitored on a daily basis, and portfolios are adjusted regularly to ensure positioning remains consistent with the evolving macroeconomic and market backdrop; the asset allocation presented represents a snapshot as of month-end.
A flexible and tactical investment approach remains appropriate in navigating an environment characterized by elevated uncertainty and persistent volatility, allowing for rapid adjustments to portfolio positioning in response to changing market conditions.
Legend
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CPI: Consumer Price Index GDP: Gross Domestic Product FOMC: Federal Open Market Commitee BOJ: Bank of Japan |
FED: Federal Reserve System EIB: European Investment Bank BOE: Bank of England SNB: Swiss National Bank |
ZEW: Zentrum für Europeische Wirtschaftsforschung (Center for European Economic Research) YoY: Year on Year MoM: Month on Month |
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