As we dive into the economic landscape of the past week, various market indicators have shown a significant shift, with the US dollar index experiencing its third consecutive week of decline, now resting at a low of 106.657. The market's growing fatigue with the U.S. government's fluctuating trade policies, bonds to the "America First" doctrine, is palpableInvestors are feeling the strain as uncertainty looms over potential tariff adjustments and their implications.

On a contrasting note, gold continues its impressive run, on track for its ninth straight week of gainsThe precious metal reached an intraweek high of approximately $2,955 per ounce—an all-time recordContributing factors include ongoing concerns over tariffs that have redirected gold flows towards the U.S., alongside hints from the American government regarding a reconsideration of the value of gold reservesHowever, the momentum saw a slight pullback after U.STreasury Secretary Janet Yellen indicated there were no plans to reassess the gold reserves within sovereign wealth funds, resulting in gold's price stabilizing at $2,935.84 per ounce by week's end.

The currency market has also shown notable activity, particularly with the Japanese yenHeightened expectations surrounding an imminent interest rate hike by the Bank of Japan have prompted the USD/JPY exchange rate to fall below the 150 threshold, marking its first dip below this margin since December 9 of the previous year, closing at 149.281. Moreover, the Euro, British Pound, and Australian Dollar are all poised for their third consecutive week of appreciation against the U.S. dollar.

Meanwhile, crude oil prices have faced headwinds for the fifth consecutive week, spurred by initial price gains as concerns around supply disruptions from various events aroseFollowing cold weather in North Dakota—a significant oil-producing state—speculation grew concerning potential reductions in oil output due to disruptions in Russian and U.S. supplies

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However, a report emerging on Friday indicated the U.S. was pressuring Iraq to restore oil exports from the Kurdish region, prompting a sharp decline in oil prices that erased earlier gains.

In U.S. equity markets, the week was less than favorableThe Dow Jones Industrial Average fell by 2.51%, the S&P 500 index dropped 1.66%, and the Nasdaq mirrored the Dow's performance, also declining by 2.51%.

Analyzing insights from investment firms reveals a mixed outlook for the coming yearGoldman Sachs has raised its 12-month target for the MSCI China index from 75 to 85, and the target for the Shanghai Composite Index from 4,600 to 4,700. Citigroup, in a bold move, increased its target for the Hang Seng Index for the first half of the year from 21,000 to 23,800, with an end-of-year target now set at 24,500, up from a previous estimate of 22,000. Paris-based BNP Paribas predicts the Federal Reserve might hold off on interest rate cuts until mid-2026, presenting a long-term perspective on monetary policyAdditionally, Goldman Sachs has adjusted its gold price expectations for the end of 2025 from $2,890 to $3,100 per ounce, citing increased central bank demand as a significant driverThey emphasize a growing risk for traders who may underestimate the potential for a rise in new tariffs and their effect on the dollar's strengthThe overarching narrative suggests that the bull market in metals, which began in 2019, remains far from over, influenced by liquidity levels and inflation concerns.

In a significant policy communication from the Federal Reserve, meeting minutes revealed that officials unanimously agreed to maintain the current interest rates until inflation aligns reliably with their 2% goalChallenges stemming from domestic trade plans have made these officials exceedingly cautious about potential rate cutsThe risks associated with inflation have raised concerns, with policymakers apprehensive of their potential impact on the job marketSurveillance for changes in geopolitical dynamics, potential disruptions in supply chains, and unexpectedly strong consumer spending were highlighted.

In response to the current economic climate, several Federal Reserve officials stressed the importance of a prudent approach

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Fed Board member Michelle Bowman anticipates a decline in inflation but acknowledges the lingering upward risks, noting excessively high asset prices might slow down the deflationary processGovernor Christopher Waller also pointed to recent disappointing consumer price indices, attributing them to possible seasonal adjustments, yet expects inflation to retake a downward trajectory in the near term.

On the tariff front, Chicago Fed's Austan Goolsbee noted that if tariffs lead to inflation spikes, this would require careful consideration from the FedWaller, on the other hand, attempted to downplay concerns, suggesting that tariffs would only have a transient and mild impact, thus not significantly influencing policy decisions going forward.

Looking at forecasts for interest rates, Bowman expressed the need for stronger confidence in decreasing inflation prior to any rate cutsPhiladelphia Fed's Patrick Harker indicated that the current economic landscape supports a sustained rate-holding scenarioAtlanta Fed President Raphael Bostic appeared more dovish, predicting two rate cuts within the year while still acknowledging the uncertainties surrounding this forecast.

The tech world was shaken up by Elon Musk's introduction of the latest AI model, Grok 3, with claims of it being "the most powerful AI on the planet." Musk emphasized that its computational capabilities outperform predecessors tenfold, particularly in areas of mathematical reasoning and scientific logic—potentially eclipsing competitors like Gemini, DeepSeek, and ChatGPTFollowing its release on platform X for Premium+ subscribers, Grok 3 transitioned to free access for all usersAlongside this, xAI launched a new subscription service dubbed SuperGrok, with plans for future open sourcing of earlier Grok models.

In broader developments, insights suggest Musk's social media company X is negotiating with investors to raise funds at a valuation of $44 billion—matching the acquisition price from 2022.

Turning to Australian and New Zealand economies, the Reserve Bank of Australia (RBA) made headlines with its first interest rate cut in four years, dropping the benchmark rate by 25 basis points to 4.1%, marking the onset of anticipated monetary easing

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