(Jan 19): Gold and silver jumped to record highs as President Donald Trump’s intensifying push to take over Greenland fuelled fears of a damaging trade war between the US and Europe.
Spot gold rose as much as 2.1% to near US$4,700 an ounce, while silver surged as much as 4.4% as Trump’s aggression weighed on the dollar and buoyed demand for havens. The US will slap tariffs on eight European nations — including France, Germany and the UK — that oppose the plan to acquire Greenland.
The 10% levies will kick in on Feb 1 and rise to 25% in June. European leaders are discussing several options for how to respond, including retaliatory levies on €93 billion of US goods, people familiar with the talks said.
“We are constantly experiencing new provocations, we are constantly experiencing new antagonism, which President Trump is seeking, and here we Europeans must make it clear that the limit has been reached,” German Finance Minister Lars Klingbeil said Monday in Berlin alongside his French counterpart Roland Lescure.
French President Emmanuel Macron may request the activation of the European Union’s (EU) anti-coercion instrument (ACI), Bloomberg reported. The ACI is the bloc’s most powerful retaliation tool, and allows the EU to deploy an array of steps in response to coercive trade measures.
The US’s tariff threats over Greenland are “reminiscent of a mafia extortion racket,” said Peter Mallin-Jones, an analyst at Peel Hunt LLP. “The precious metal impact looks a reaction to a move away from US dollar assets and the potential inflationary impact of a trade war between the US and EU, let alone a chilling effect on economic activity.”
See also: Gold extends powerful rally as crisis over Greenland worsens
Precious metals have rallied sharply this year, following dramatic gains in 2025, as the US seized Venezuela’s leader and then doubled down on threats to take Greenland. The Trump administration has also renewed attacks on the Federal Reserve, intensifying worries over the central bank’s independence and fueling the debasement trade, where investors avoid currencies and government bonds on concerns over debt levels.
The Greenland-inspired tensions are different from last year’s Liberation Day tariffs as they “point to a deeper geopolitical fault line”, said Charu Chanana, the chief investment strategist at Saxo Markets in Singapore. “Using tariff threats inside the alliance is a kind of trust shock that can leave a stickier risk premium,” she said, referring to Nato.
A broader rotation into the metals complex, led by investors in China, has added further impetus to the rallies in gold and silver. Exchange-traded funds’ gold holdings jumped by more than 28 tonnes last week, the biggest increase since September, and have expanded in seven of the last eight weeks.
See also: Gold, platinum hit records as crisis over Greenland worsens
Many analysts expect the stunning gains to continue, with Citigroup Inc last week forecasting that gold would reach US$5,000 within three months, and that silver would get to US$100 an ounce.
Spot gold climbed 1.6% to US$4,668.46 an ounce as of 10.01am in London, and earlier hit a peak of US$4,690.59. Silver was up 3.3% at US$93.0744, and earlier touched US$94.1213. Platinum rose and palladium edged higher. The Bloomberg Dollar Spot Index declined 0.2%.
Investors will be keeping close tabs on the US Supreme Court’s argument on Trump’s effort to fire Fed governor Lisa Cook, which is due on Wednesday and could be pivotal for the central bank’s independence.
Uploaded by Felyx Teoh
