International News 02 February 2026
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China’s Factory Activity Slips into Contraction as Domestic Demand Weakens
China’s factory activity slowed in January 2026, with the official manufacturing PMI falling to 49.3 from 50.1 in December, below both the expansion threshold of 50 and market expectations. The decline was driven by weaker new orders and new export orders, which dropped to 49.2 and 47.8 respectively, signaling soft domestic and external demand at the start of the year. The non-manufacturing PMI, covering services and construction, also fell into contraction at 49.4, its lowest level since December 2022. Although China met its 5% growth target last year on the back of strong exports, underlying imbalances remain as retail sales stay subdued and fourth-quarter GDP growth slowed. Authorities have rolled out measures to support consumption and monetary easing, including targeted rate cuts and signals of further policy support. However, analysts remain cautious, warning that additional stimulus may be needed to keep 2026 GDP growth above 4.5%, with the official growth target expected to be set in the 4.5%–5% range.
Gold Suffers Historic Sell-Off After Trump Names Fed Chair Pick
Gold prices plunged sharply on Friday, January 31, 2026, heading for their biggest single-day decline since 1983 after U.S. President Donald Trump announced former Federal Reserve Governor Kevin Warsh as his nominee to replace Jerome Powell as Fed Chair in May. Spot gold fell 9.5% to US$4,883.62 per ounce, after hitting a record high of US$5,594.82 a day earlier, while U.S. February gold futures closed down 11.4% at US$4,745.10. Analysts said the sell-off was largely driven by aggressive profit-taking following the recent price surge, amplified by broader macro factors and the Fed leadership announcement. Despite the sharp correction, gold remains up more than 13% for the month, marking its sixth consecutive monthly gain. The U.S. dollar index rose 0.7% from a four-year low, making dollar-priced gold more expensive for overseas buyers. Other precious metals were hit even harder: spot silver collapsed 27.7% to US$83.99 per ounce—potentially its largest daily drop on record—after reaching a high of US$121.64 earlier in the week. Platinum slid 19.2% to US$2,125, while palladium fell 15.7% to US$1,682. Analysts noted that January 2026 may go down as the most volatile month in precious metals history, with further near-term corrections possible before prices stabilize into a more moderate uptrend.
Kevin Warsh Faces Scrutiny Over Corporate Roles as Fed Chair Pick
Kevin Warsh, President Donald Trump’s choice to lead the U.S. Federal Reserve, is under scrutiny due to his ties to Coupang, a Seattle-based e-commerce company at the center of rising trade tensions between the United States and South Korea. Warsh has served on Coupang’s board since 2019 and has earned more than US$1 million since 2020, including nearly US$325,000 annually since 2022. The issue is sensitive as Coupang is being investigated by South Korean regulators over a major data breach—an inquiry some U.S. investors view as discriminatory against an American firm. The matter has escalated to the diplomatic level, coinciding with President Trump’s decision to raise U.S. tariffs on South Korean cars and other goods from 15% to 25%, prompting Seoul to seek renegotiation. Warsh, 55, is a former Federal Reserve Governor (2006–2011) and currently teaches at Stanford University. However, U.S. law requires Fed Governors to hold no outside employment and devote their full time to central bank duties. The White House has not clarified whether Warsh would be required to step down from private-sector roles, and Warsh has not commented publicly. In addition to Coupang, he has served on UPS’s board since 2012, earning roughly US$285,000–US$305,000 annually in recent years. Federal Reserve ethics rules—tightened after past trading scandals—also restrict outside business interests and certain financial activities, giving new officials up to six months to comply after taking office.