Gold prices soared to an unprecedented level, surpassing $4,800 per ounce on Wednesday. This increase was driven by heightened demand for safe-haven assets and a weakened dollar, amid U.S. President Donald Trump’s controversial pursuit of Greenland, which threatens to spark a trade conflict with Europe and disrupt the NATO alliance.
By 0226 GMT, spot gold had risen by 1.2% to $4,821.26 per ounce, after reaching a record high of $4,843.67 earlier in the session. U.S. gold futures for February delivery increased by 1% to $4,813.50 per ounce.
Kyle Rodda, a senior market analyst at Capital.com, noted, “It’s the loss of trust in the U.S. caused by Trump’s recent moves to impose tariffs on European countries and his aggressive efforts to acquire Greenland. The surge in gold prices reflects concerns about global geopolitical tensions.”
On Tuesday, Trump declared there was “no going back” on his objective to control Greenland, even refusing to dismiss the possibility of using force to acquire the Arctic island, while criticizing NATO allies. He later stated, “We will work something out where NATO is going to be very happy and where we’re going to be very happy.”
In response, French President Emmanuel Macron asserted that Europe would not succumb to intimidation, sharply criticizing Trump’s threat of imposing steep tariffs at Davos if Europe does not allow him to take control of Greenland.
Rodda explained, “Investors are selling the dollar and treasuries, particularly at the long end, and opting to buy gold instead, as there is greater confidence in gold than in the U.S. currency at the moment.”
The dollar remained near three-week lows against the euro and Swiss franc, while Asian stocks continued their decline for a third consecutive session. Meanwhile, the global bond market turmoil seemed to ease temporarily. A weaker dollar typically makes dollar-denominated metals more affordable for international buyers.
Despite Trump’s calls for interest rate cuts, the Federal Reserve is widely expected to keep rates unchanged at its meeting on January 27-28. Non-yielding bullion generally performs well in low-interest-rate environments.
Spot silver dropped by 1% to $93.59 per ounce, following a record high of $95.87 on Tuesday. Spot platinum decreased by 0.7% to $2,445.96 per ounce after reaching a record $2,511.80 earlier in the day, while palladium fell by 0.5% to $1,857.19.
