In a tumultuous day for the global markets, gold prices experienced a significant decline of over 1%, trading around $2,740.91 per ounce on TuesdayThis drop followed a peak close to historical heights, triggered by the ramifications of a shocking development known as DeepSeekThe broader market responded negatively to this news, prompting investors to liquidate their gold positions in order to cash out amidst the instabilityMeanwhile, crude oil prices also faced a downturn, settling at approximately $73.18 per barrel, marking a 2% decline and its lowest level in two weeksConcerns surged regarding the energy demands of data centers owing to rising interest in low-cost AI models introduced by DeepSeek, which shifted the market dynamics significantly.

Investment sentiment was further affected by key economic data to be released, including preliminary figures on U.S. durable goods orders for December, the Conference Board's consumer confidence index for January, and a speech by European Central Bank Governor Francois Villeroy de GalhauThis combination of market volatility and anticipated economic indicators placed substantial pressure on traders, compounding the uncertainty in the financial atmosphere.

In the U.S. stock markets, closing figures revealed a mixed performance among the major indicesThe Dow Jones Industrial Average posted a modest gain of 0.65%, while the S&P 500 fell sharply by 1.46%. The Nasdaq Composite faced an even harsher hit, plummeting by 3.07%. Particularly, the tech company Nvidia saw its stock crash by nearly 17%, leading to a calamitous loss in market capitalization — a staggering $589 billionCEO Jensen Huang’s net worth dropped by a monumental $20.8 billion, pushing him down several ranks in the Forbes billionaire list.

The CEO of Annex Wealth Management, Brian Jacobsen, highlighted the potential disruption that DeepSeek poses to the artificial intelligence narrative that has driven much of the market growth over the past two years

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If this initiative results in less demand for high-performance chips and energy, it could herald a significant cooling down period for the tech industryOn one hand, AI might become more accessible across varied platforms, fostering the growth of beneficial applications; however, it might simultaneously result in a decline in demand for computing resources.

In markets closely tied to gold, further declines were marked on Monday, as global stock markets tumbled, leading many investors to seek safer investmentsThe yield on U.STreasury bonds reached a three-week low and the dollar index fell to its lowest since December 18, reflecting a shift towards risk-averse assets amid financial unpredictabilityThis downward momentum in gold prices continued, with spot gold dropping to $2,736.75 per ounceAmerican gold futures decreased by 1.5% to $2,738.40. Notably, silver followed suit, dropping 1.7% to $30.10 per ounce, and palladium weakened by 2.9% settling at $959.

The oil market was not immune to the sweeping changes, also adjusting to the implications of DeepSeek’s market entryOil prices fell approximately 2% on Monday, amid concerns about rising energy demands for data centers powered by this new AI modelPrior to the announcement regarding DeepSeek, crude oil had already been declining; with fears mounting over proposed tariffs by the U.S. that might further inhibit economic growth and diminish energy demand on a larger scaleBrent crude futures closed down $1.42, settling at $77.08 per barrel, while U.S. crude futures finished at $73.17, both reflecting their lowest settlements since early January.

Analysts at Jefferies underscored the dramatic shift caused by the DeepSeek model, claiming it to be not only more energy-efficient but also more cost-effective, leading to widespread concern regarding predictions for U.S. power needs, which had projected a staggering 75% reliance on AI by 2030-2035. Meanwhile, the uncertainties surrounding tariffs were seen as dampening global oil demand and were a cause of additional pressure on prices.

Currency markets reacted similarly, with the Japanese yen and Swiss franc appreciating against a broadly weaker dollar on Monday

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