It’s not about Trump, it’s about China and Europe

Blain’s Morning Porridge Jan 26th, 2026 – It’s not about Trump, it’s about China and Europe“Europe loves to talk about the future but does nothing about it today.”Gold surges through $5000 and markets remain distracted by the sturm et drang of words and events. The world is changing – but are we thinking about all the wrong things? The real issue for the future may be investment choices between authoritarian states vs nimble democratic nations. This morning Gold spot is $5060. Investment banks and commodity research firms had a $4900 year-end target. It’s taken less than a month. Goldman has hiked its 2026 yellow-metal target to $5400. (The way things are going, we’ll be through that by March.)Gold is a reliable measure of risk. The really interesting thing is how the 10-yr US Treasury Yield jumped 10 bp last week, and remains in the 4.20-25% range. In bond markets there is truth – Treasuries have decoupled from gold, meaning they no longer look such a safe-haven asset in a time of escalating tension. The world’s view of risk and safe havens has changed and changed utterly.This week’s delivery of the Morning Porridge might be a bit random. I’m in Austria, taking part in Interbourse, a celebration of skiing and markets with over 400 finance professionals from across Europe and North America having a tremendous time on the slopes. The great thing about any industry social event is meeting folk – and hearing what they really think.The consensus on piste (and bars) is the world is changing and less predictable. I’ve chatted with a leading Brexiteer who now admits the UK leaving the EU was a strategic disaster. Lots of people are praising Mark Carnery as the global voice of rational reason. Zelensky’s talk at Davos is seen as a wake-up call to Europe (essentially saying the same as Trump, but with credibility!) There are supporters of the US President – although most admit his multiple flaws – arguing with much good sense that Trump is a necessary evil as a catalyst for the rejuvenation of America. Europeans do not hate Americans – they love them – but are deeply concerned about why the Trump administrations so despises them, and by what is happening domestically. Europe and Democrats are not the enemy.Being market professionals – we’re all trying to figure out how the world is changing, where shifting geopolitics will lead, and what will it mean for future investments, prices and growth. If I knew the answer to these questions, I’d be staying in a more expensive hotel!You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!