- January 31, 2026
- Posted by: Tresmark
- Categories:
Tresmark: Scientists, including Albert Einstein, created the Doomsday Clock in 1947. One of their stated rules is:
“The clock is not about predicting apocalypse. It is about measuring how reckless humanity is being right now.”
This week, the Doomsday Clock moved closer by 4 seconds.
We are now at 85 seconds to midnight, the closest ever.
The reason is accumulation.
– More wars.
– Weaker global guardrails.
– Rising climate and AI risk.
– And growing financial instability.
The clock is symbolic. Markets are not.
What we are seeing now is an economic version of the same anxiety.
Gold and volatility (see at the bottom for how to trade precious metals)
Gold and metals surged sharply this month, then reversed just as fast.
That is not normal safe-haven behaviour. It points to crowded positioning and thin liquidity.
But gold is asking a deeper question.
One about policy, paper currency, and the broader capitalist structure.
Fed independence is being priced
Central bank independence used to be an academic topic. Now it is a market variable.
Political pressure on the Fed has introduced uncertainty and markets are reacting to that
The dollar is losing its automatic bid
The Dollar Index slipped to around 96 and trading near 97 now.
In earlier global stress cycles, the USD strengthened by default. This time, it is not.
Our view remains that DXY can move toward 92 this year if policy uncertainty and trade tension persist.
Trade wars and shifting alliances
Tariffs are increasingly being used as a tool of intimidation, even among partners. The result is higher uncertainty, fragmented trade, and a rising cost of capital.
This does not break the system overnight. It weakens it gradually.
Japan is back in focus
Japan is no longer a quiet anchor. Bond volatility and policy normalisation there matter for global rates.
If Japan shifts, term premiums everywhere respond.
Key takeaway
This is not panic. But it is not normal either.
Markets are repricing credibility, not just risk.
In this environment, protection matters more than premium. Somehow, Pakistan is relatively better positioned to weather this volatility. Most indicators, barring exports and productivity, are holding up, and the country remains outside the spotlight of major global conflicts. Pakistan’s challenge is not growth or rates. It is consistency and trust.
Currency outlook
Over the past week, we saw exporters increase forward bookings despite relatively weak premiums. More importantly, exporters are booking longer tenors than usual. That behaviour suggests expectations of a range-bound rate environment, rather than sharp moves. Hedging today is being driven more by costing than fear.
SBP and monetary policy
As expected, SBP kept rates unchanged, citing sticky core inflation. At the same time, it reduced CRR requirements, adding liquidity to the system. On the surface, this looks contradictory, as lower CRR is inflationary. More likely, SBP is balancing inflation optics with the need to release surplus liquidity, particularly ahead of fiscal pressures such as the super tax.
Precious metal Positioning (Gold/Silver)
The recent pullback was the culmination of several things happening together
– Liquidation as escalation risk with Iran increased
– Profit taking after a quick, crowded rally
– Margin calls – liquidation – stops hit. Repeat
– Successor to Fed. Traders earlier thought Trump would bring in someone ultra dovish (lowering interest rates significantly). However, the potential successor, Walsh, is not that.
There has been no sustained surge in the dollar, no spike in real yields, and no sign of large structural selling. In other words, the dip reset the trade rather than reversing it. Gold is no longer behaving like a hedge. It is behaving like insurance. Most likely, the uptrend will continue as investors respond to a quiet erosion of confidence in monetary and geopolitical anchors. But the pace of the uptrend will be more sustainable.
Historically, fear flowed into the USD. This time, its flowing in to Gold
