DBG Markets: Market Report for Jan 23, 2026

US Economic Resilience, BoJ Policy in Focus; Whats Next for Dollar, Metals & Yen？

The U.S. economy displayed unexpected strength yesterday as the updated reading for Q3 2025 GDP (released in Jan 2026 following shutdown delays) was revised upward to 4.4% (annualized), surpassing the initial estimate of 4.3%. This growth was primarily fueled by robust investment and a significant rebound in exports, highlighting a resilient domestic backdrop.

Parallel to this, the Feds preferred inflation gauge, the Core PCE Price Index, remains elevated above the 2% target. The annual rate held firm at 2.8% – 2.9%, while the month-over-month reading met expectations at 0.2%. Although inflation remains stubborn, the fact that it did not surprise to the upside has eased market fears of a "Higher-for-Longer" escalation, providing a slight reprieve for risk sentiment.

The Dollars Paradoxical Weakness

Despite the "stronger-for-longer" economic data, the US Dollar Index traded lower, slipping toward the 98.00 key range. This downward move can be attributed to:

· "Sell the News" Dynamics: With a resilient economy already priced in, the lack of a hawkish surprise in the PCE data triggered profit-taking on long dollar positions.

· Geopolitical De-escalation: President Trumps softened rhetoric regarding the "Greenland Ultimatum" at the Davos forum removed a significant portion of the "Trade War" premium that had been buoying the Greenback.

· Fed Patience: The data reinforced the consensus that while a rate cut is not imminent in Q1, the Fed remains on a path toward policy normalization later in 2026.

USD Index, H4 Chart

Technically, 98.50 remains the critical level to maintain any sustained dollar upside. The break below this level yesterday has placed the dollar under significant selling pressure.

Outlook: The broad trend remains a consolidation, but trading below the 99-point mark suggests a downside-favorable environment. In the near term, any rebound toward 98.50 should be viewed as a potential "short-the-rally" opportunity.

Precious Metals Explosion: Gold and Silver Hit All-Time Highs

Gold and Silver experienced a "parabolic" move yesterday, defying solid U.S. economic data. Gold (XAU/USD) surged over $80 to trade above the $4,900 mark, extending toward $4,960 during today's Asian session. Meanwhile, Silver (XAG/USD) skyrocketed by over 4%, surpassing the $95.00 milestone.

Even as trade-war fears cooled, investors rotated into metals as a hedge against potential geopolitical tensions and long-term fiat currency debasement—themes that have sustained the precious metals rally throughout the past year.

Gold Outlook

XAU/USD, H2 Chart

The next major psychological resistance sits at the $5,000 level. Immediate support is found at the previous breakout zone of $4,880 – $4,850.

Any dip above the $4,800 floor (or the imminent support at $4,880) continues to support a bullish bias.

Outlook: Statistically, with $5,000 being a significant psychological target, assets often act as a "magnet" to such round numbers. Current momentum suggests a high probability of gold testing $5,000 in the coming sessions.

Silver Outlook

XAGUSD, H2 Chart

Having cleared $95.00, silver is following a similar path to gold, eyeing the $100.00 milestone. Technically, any pullback that holds above the $90.00 level is likely to see strong institutional bidding

Bank of Japan: The "Wild Card" Today

The markets primary focus now shifts to Tokyo. The Bank of Japan (BoJ) delivered a "hold" at 0.75% earlier today, as expected. However, the market is anticipating an upgrade in inflation forecasts and potential hints regarding an April rate hike.

All eyes are now on the BoJ Press Conference at 14:30 (GMT+8). If Governor Ueda fails to deliver a hawkish surprise or a firm commitment to normalization, Yen downside may extend further—especially against resilient majors like the Euro and Australian Dollar.

USDJPY, H4 Chart

Following the breakout of the near-term downtrend channel and a successful reclaim of the 158.0 level, USDJPY has resumed its uptrend continuation trajectory.

Outlook: The trend remains bullish unless 158.0 fails to hold. The primary risk remains intervention if the pair reaches the 159.0 – 160.0 zone. However, at this point, the path of least resistance remains to the upside unless a hawkish surprise emerges from the press conference later today.