The prices of gold and silver surged to unprecedented record highs on Monday morning, as global financial markets reacted with alarm to a fresh geopolitical shock from former US President Donald Trump.
Markets Rush to Safe Havens
Investors scrambled for traditional safe-haven assets after Trump threatened to impose punishing new tariffs on eight European countries, including the UK, France, and Germany. The dramatic move is part of his escalating campaign to force the purchase of Greenland from Denmark.
The spot price of gold jumped by 1.6% to reach $4,666 per ounce in early trading, after touching a historic peak of $4,689. Similarly, US gold futures for February delivery advanced 1.7% to $4,671.90.
Silver also experienced a remarkable rally, hitting a record high of $94.08 an ounce before settling at $93.15, which still represented a significant gain of 3.6% for the session.
The Tariff Threat That Shook Markets
The volatility was triggered by a lengthy post from Donald Trump on his Truth Social platform on Saturday. He declared his intention to impose an initial 10% tariff on all goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland, starting 1 February.
Trump stated this tariff would then escalate to a substantial 25% from 1 June. He explicitly linked the measure to his territorial ambition, writing: "This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland."
This extraordinary threat caused immediate ripples across currency markets. The US dollar fell sharply by 4% against the Swiss franc, another classic safe-haven currency, and dropped 0.2% against the Japanese yen.
Wider Fallout and Prepared Response
Anticipating a difficult start to the week, stock markets in London and across Europe were poised for losses at the opening bell on Monday. The prospect of a renewed transatlantic trade war has unsettled investors globally.
In response to the threat, EU ambassadors are reportedly already preparing a suite of retaliatory measures should Trump follow through with the proposed tariff increases.
Matt Simpson, a senior market analyst at StoneX, commented on the situation: "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 simultaneous surge in precious metals and the dollar's decline underscore a classic flight to safety, as traders hedge against potential economic disruption and heightened political uncertainty stemming from the White House.
