(Jan 21): Gold extended its record rally as the crisis over Greenland and a meltdown in Japanese government debt supported haven demand.
President Donald Trump, who is scheduled to address the World Economic Forum at Davos in Switzerland, showed no signs of backing down on his grab for the Arctic island. That prompted Greenland’s prime minister to warn the population of a possible military invasion, though he added it was an unlikely scenario.
Copper joined the metals surge with gains towards US$13,000 a ton, as Goldman Sachs Group Inc forecast continued flows into the US — a key driver behind the industrial metal’s powerful price rally.
The US has now threatened tariffs on eight European nations — including Germany, France and the UK — which opposed Trump’s plan to take over Greenland, raising the spectre of a damaging trade war. French President Emmanuel Macron attacked Trump’s trade tactics, saying the continent needed more sovereignty to avoid “vassalisation and blood politics,” while Canadian Prime Minister Mark Carney said the rules-based international order was effectively dead.
The war of words in Davos underscored how quickly the relationship between traditional US allies has deteriorated, rattling financial markets, pushing down the dollar and boosting demand for havens like precious metals.
See also: Gold, platinum hit records as crisis over Greenland worsens
A meltdown in Japanese sovereign debt also highlighted worries about the fiscal situations of major economies, fuelling the so-called debasement trade where investors avoid currencies and government bonds.
Spot gold rallied 2.4% to a record US$4,878.22 an ounce on Wednesday, while silver fluctuated near US$95 after reaching an all-time high on Tuesday. Platinum hit a record of
US$2,511.10 before giving up its gains to trade little changed.
The situation in Japan is spurring “fear of market-led debasement in the rest of the world,” Daniel Ghali, a senior commodity strategist at TD Securities, wrote in a note. “Gold’s rally is about trust. For now, trust has bent, but hasn’t broken. If it breaks, momentum will persist for longer.”
See also: Gold hits record high as Greenland tensions fuel trade war fears
Gold is poised for more support from the world’s biggest reported buyer, the National Bank of Poland. The central bank approved plans to purchase another 150 tons, while Bolivia’s central bank has resumed purchases for its foreign reserves under new regulations enacted in December 2025.
“Gold remains our highest conviction,” Daan Struyven, co-head of commodities research at Goldman Sachs Group Inc, said at a media briefing on Wednesday, citing continued purchases by central banks. He reiterated Goldman’s base case scenario is for gold to climb to US$4,900 an ounce, with risks to the upside, should private sector diversification broaden out.
Investors will also be watching a hearing before the Supreme Court relating to Trump’s attemp to fire Federal Reserve Governor Lisa Cook. Justices are set to consider whether the US president can oust Cook on Wednesday, while the legal fight over the allegations of mortgage fraud proceeds.
Spot gold was 2.4% higher at US$4,878.41 an ounce at 2:23 pm in Singapore, while platinum was steady at us$2,473.99 after advancing as much as 1.5% earlier. The Bloomberg Dollar Spot Index was steady after falling 0.5% over the previous two sessions.
Uploaded by Evelyn Chan
