On Monday, gold and silver reached unprecedented heights, driven by safe-haven trading as President Trump issued tariff threats against certain European nations related to Greenland.
By early afternoon, spot gold had climbed 1.7% to $4,672.49 an ounce, having peaked at a record $4,689.39.
In addition, U.S. gold futures for February jumped 1.8% to $4,677.70 an ounce.
Silver also made waves, hitting a record high of $94.61 per ounce, which contributed to its overall 5% increase to $94.41.
The escalating tensions concerning Denmark’s Arctic territory intensified over the weekend when Trump warned several European allies of potential tariffs unless the U.S. could acquire Greenland.
Linh Tran, a senior market analyst, noted, “When systemic or policy risks come into play, markets usually respond quickly, shifting towards safe-haven assets, and gold seems to be the go-to choice once again.”
Investor apprehension surged as the focus shifted to safe-haven assets—gold, the Japanese yen, and the Swiss franc—as concerns around the dollar grew due to Trump’s latest tariff threats.
Gold traditionally performs well amidst geopolitical tensions and economic uncertainty, with its value rising by over 64% in 2025 and more than 8% since the year began.
Meanwhile, Federal Reserve Vice Chair Michelle Bowman indicated that the Fed should be ready to lower interest rates again if necessary, especially given the unstable job market that could quickly deteriorate.
While markets anticipate the Fed will maintain steady interest rates during its January 27-28 meeting, there are expectations of at least two rate cuts of 25 basis points this year.
Looking at other metals, spot platinum increased 1.5% to $2,362.65 an ounce, while palladium rose 1.1% to $1,819.99.
Citi Research analysts expressed their optimism for precious metals, projecting gold prices might reach $5,000 an ounce and silver could hit $100 an ounce in the coming three months, largely due to ongoing geopolitical tensions.
