Markets fall and gold and silver jump to record highs on Greenland tariff threats

Gold and silver surged to record highs as European stock markets fell after US President Donald Trump threatened to impose additional tariffs on eight European countries. The push to acquire Greenland has intensified fears of a potential US-Europe trade war.

Gold and silver rose sharply, with spot gold climbing as much as 2.1% to near $4,700 an ounce and silver jumping 4.4%. Trump’s aggressive trade stance weighed on the dollar and increased demand for safe-haven assets.

The US said it would impose tariffs on eight European nations, including France, Germany and the UK, which oppose the plan to acquire Greenland.

Stock markets across Europe fell on opening. France’s CAC 40 dropped 1.6%, Germany’s DAX fell 1.4%, and Spain’s IBEX 35 slid nearly 1%. In London, the FTSE 100 was down 0.3%.

The losses hit key sectors, with Volkswagen, BMW, and Mercedes-Benz falling between 2.5% and 4%, while Stellantis, the owner of Peugeot, dropped 2%.

US markets were closed on Monday for Martin Luther King Jr. Day, but US tech stocks listed in Europe also declined. Alphabet shares in Frankfurt fell 2.4%, while Nvidia et Microsoft were down 2.2%. Investors moved cautiously, with rising interest in safe-haven assets like gold and silver.

On Saturday, Trump threatened to impose a 25% tariff on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland until the US could proceed with acquiring Greenland. This marked a major step in the president’s campaign to claim the autonomous Danish territory.

Tariffs set to escalate in coming months

In a long post on Truth Social on Saturday, Trump said he would impose a 10% tariff “on any and all goods sent to the United States of America,” starting on February 1. If no deal is reached, the tariff will increase to 25% on 1 June.

The announcement drove the dollar down 4% against the Swiss franc and 0.2% against the Japanese yen, both considered safe-haven currencies.

People familiar with the talks said European leaders are discussing several options to respond. These include retaliatory levies on €93 billion ($108 billion) of US goods.

German Finance Minister Lars Klingbeil said Monday in Berlin, alongside his French counterpart Roland Lescure: “We are constantly experiencing new provocations. We are constantly experiencing new antagonism, which President Trump is seeking. Here in Europe, we must make it clear that the limit has been reached.”

EU considers strongest retaliation tools

Bloomberg reported that French President Emmanuel Macron may request activation of the European Union’s anti-coercion instrument (ACI). The ACI is the bloc’s strongest retaliation tool, enabling the EU to take a range of measures in response to coercive trade actions.

Matt Simpson, a senior analyst at global financial services firm StoneX, said: “With Trump adding tariffs into the mix, it is clear that his threat to Greenland is real. Geopolitical tensions have given the gold and silver bulls another reason to push prices to new highs.”

Kathleen Brooks, research director at broker XTB, noted that stocks in Asia were lower across the board. European and US equity market futures also started the week in decline.

Gold and silver surged, both reaching record highs, while the dollar fell broadly. Markets showed signs of risk aversion as investors awaited developments in the Greenland situation.

Brooks said this was a “big week for markets, and it hinges on Donald Trump’s tone at Davos. If he increases pressure on Europe to let him have control of Greenland, we do not think that the benign market environment can persist. Volatility – which is still well below the 12-month average – is unlikely to remain low as we move through January.”

Analysts warn of deeper trade-war risks

Peter Mallin-Jones, an analyst at Peel Hunt LLP, described the US’s tariff threats over Greenland as “reminiscent of a mafia extortion racket.”

He said the impact on gold and silver appears to result from a shift away from US dollar assets. It also reflects the potential inflationary impact of a US-EU trade war and the chilling effect on economic activity.

Gold and silver rally on geopolitical and Fed fears

This year, precious metals have rallied sharply after dramatic gains in 2025. That surge followed the US seizing Venezuela’s leader and escalating threats to take control of Greenland.

The Trump administration has also renewed attacks on the Federal Reserve, raising concerns about the central bank’s independence. These developments have driven investors toward gold and silver as hedges against currency and debt risks.

NATO tensions add lasting risk premium

Charu Chanana, chief investment strategist at Saxo Markets in Singapore, said that Greenland-related tensions differ from last year’s Liberation Day tariffs. She noted that they “point to a deeper geopolitical fault line.”

She added that “using tariff threats inside the alliance is a kind of trust shock that can leave a stickier risk premium,” referring to NATO.

Investor inflows boost gold and silver demand

Investor demand, led by buyers in China, has boosted rallies in gold and silver.

Exchange-traded funds’ gold holdings rose by more than 28 tons last week. This was the biggest increase since September and the seventh rise in the past eight weeks.

Many analysts expect the gains to continue. Citigroup Inc. forecast last week that gold could reach $5,000 within three months. Silver is expected to rise to $100 an ounce.

Gold and silver climb as dollar weakens

Spot gold climbed 1.6% to $4,668.46 an ounce as of Monday 19 January, and earlier hit a high of $4,690.59. Silver was up 3.3% at $93.0744, and earlier touched $94.1213. Platinum went up and palladium edged higher. The Bloomberg Dollar Spot Index declined 0.2%.

Rising global uncertainty prompted traders to reduce speculative assets. They shifted further into physical assets, such as gold and silver. This trend had driven a broad metal rally through late 2025.

Silver and platinum also benefited from this rally, although they faced some profit-taking on Tuesday. Spot silver fell 0.1% to $94.2890/oz following a record high in the previous session. Spot platinum dropped 0.6% to $2,361.47/oz. Industrial metals were similarly boosted by increased demand for physical assets. Benchmark copper futures on the London Metal Exchange fell 0.4% to $12,927.58 a tonne, but remained close to recent record highs.

DISCLAIMER: This information is not considered as investment advice or an investment recommendation, but is instead a marketing communication.