The prices of gold and silver have surged to historic peaks, as investors stampeded towards traditional safe-haven assets in response to a fresh geopolitical shock from former US President Donald Trump.
Trump's Tariff Ultimatum Sends Shockwaves
In a dramatic escalation of his long-standing interest in Greenland, Trump used his Truth Social platform on Saturday to threaten a series of punitive tariffs on eight European nations. He stated he would impose an initial 10% tariff on all goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting 1 February.
This levy, Trump declared, would then rise to a steep 25% on 1 June. He explicitly linked the measure to his ambition for the US to purchase Greenland, an autonomous Danish territory, stating the tariffs would remain "until such time as a Deal is reached for the Complete and Total purchase of Greenland."
Markets React with Flight to Safety
The immediate market reaction on Monday morning was a sharp pivot towards assets perceived as stable during times of uncertainty. The precious metals market led the charge.
The spot price of gold jumped by 1.6% to reach $4,666 per ounce, after touching an all-time intraday high of $4,689. Meanwhile, US gold futures for February delivery advanced 1.7% to $4,671.90.
Silver, often more volatile than gold, experienced an even more dramatic spike. It hit a record peak of $94.08 an ounce before settling at $93.15, still representing a hefty 3.6% gain for the session.
The threat also triggered significant movement in currency markets. The US dollar, often sold off in times of geopolitical stress, fell sharply against other traditional safe havens. It dropped by 4% against the Swiss franc and 0.2% against the Japanese yen.
Stock markets in London and across Europe were braced for losses at the opening bell, anticipating the potential impact on trade and corporate earnings.
Analysts Warn of Escalating Tensions
Financial analysts were quick to link the market movements directly to Trump's latest pronouncement. Matt Simpson, a senior analyst at StoneX, noted, "With Trump throwing tariffs into the mix, it is clear that his threat to Greenland is real. Geopolitical tensions have given the gold bulls yet another reason to push it to new highs."
The threat has not gone unanswered in diplomatic circles. Reports indicate that EU ambassadors are already preparing potential retaliatory measures should the US follow through on the tariff increase, setting the stage for a fresh transatlantic trade dispute.
This episode underscores how geopolitical rhetoric can swiftly translate into tangible financial market volatility, driving capital into the perceived security of precious metals and challenging the strength of major currencies.
