Source CNBC
SINGAPORE – Gold prices skyrocketed to unprecedented levels this week, breaching the $4,700 per ounce mark as investors fled to safe-haven assets. The surge comes in response to a fresh wave of geopolitical instability triggered by U.S. President Donald Trump’s ultimatum to European allies over his bid to acquire Greenland.
Safe Haven Demand Hits Fever Pitch
Spot gold climbed as much as 1.7%, reaching a record peak of $4,714.50 in Asian trading. The rally reflects deepening anxiety in the financial sector after President Trump announced a 10% tariff on goods from eight European nations—including Denmark, Germany, France, and the UK—slated to begin February 1.
The President stated the tariffs would escalate to 25% by June unless a deal is reached for the “complete and total purchase” of the Arctic territory.
“The re-emergence of massive tariff friction is weighing heavily on risk assets,” noted an analyst from ING. “The tailwinds for precious metals are only getting stronger as this territorial dispute turns into a full-blown transatlantic trade war.”
Asia Markets Under Pressure
While gold climbed, equity markets across Asia felt the chill of the “Sell America” trend revived by the tariff rhetoric.
Japan: The Nikkei 225 dropped 1.1%, further pressured by domestic political shifts and record-high yields on long-term government bonds.
Hong Kong & China: The Hang Seng index fell over 1%, and the CSI 300 remained volatile despite slightly better-than-expected GDP data.
India: Domestic gold rates saw their “biggest jump ever,” with 24-carat gold surging past the historic ₹1,50,000 per 10 grams milestone.
Europe Weighs “Big Bazooka” Retaliation
The targeted European nations, supported by the broader EU bloc, have reacted with a mix of defiance and alarm. Reports suggest the EU is considering the use of its Anti-Coercion Instrument (ACI)—often referred to as the “big bazooka”—to impose retaliatory sanctions on U.S. tech, aircraft, and agricultural sectors.
French President Emmanuel Macron and other leaders have signaled that the status of Greenland is non-negotiable, while U.S. Treasury Secretary Scott Bessent attempted to calm jitters at the World Economic Forum in Davos, urging partners to remain patient.
Market Outlook
Market analysts suggest that gold’s trajectory remains bullish as the February 1 deadline approaches. Combined with cooling U.S. inflation data that points toward potential Federal Reserve rate cuts later this year, the “perfect storm” for precious metals appears to be forming.
As long as the “Greenland Gambit” remains a central pillar of U.S. foreign policy, volatility is expected to remain the dominant theme in global currency and commodity markets.
