Gold tops $4,700 as Greenland tensions fuel trade war fears

The US’ threat toward its NATO allies has rattled markets, buoying demand for havens and reviving the 'Sell America' trade

• Gold surged past $4,700 amid US-Europe tensions over Greenland, boosting haven demand.
• Silver retreated after hitting an all-time peak amid market volatility
• Investors await Europe's reply to US tariffs and Supreme Court Fed case decision.

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Gold surged past $4,700 an ounce, while silver retreated from an all-time peak, as President Donald Trump’s push to take over Greenland stoked fears of a potential US–Europe trade war.

Markets are waiting for Europe’s response to Trump’s threat to impose tariffs on eight European nations that oppose his Greenland ambitions. Investors are also watching for developments from Davos, where Trump said he will meet with several parties to discuss his plan to take control of Greenland. France’s Emmanuel Macron, meanwhile, declined an invitation to join Trump’s proposed Board of Peace for Gaza. Silver touched an all-time peak of $94.7295 an ounce earlier, before pulling back.

The US’ threat toward its NATO allies has rattled markets, buoying demand for havens and reviving the “Sell America” trade. French leader Macron intends to request activation of the European Union’s anti-coercion instrument, although German Chancellor Friedrich Merz said he’s trying to get Macron to tone down his response.

“We have entered an era of resource nationalism between major powers,” Peter Kinsella, global head of FX strategy at Union Bancaire Privee SA, said in an interview on Bloomberg Television. Currencies are not necessarily the best way to play this geopolitical theme, he said. Gold remains a strong bet, he added, while cautioning against expecting easy returns from silver.

The crisis — coming hot on the heels of the US’ seizure of Venezuela’s leader — has added further impetus to what was already a breakneck rally in precious metals. The Trump administration’s renewed attacks on the Federal Reserve have also aided gold and silver this year, as they’ve revived concerns about the independence of the central bank.

“The rally in precious metals did not begin with this dispute, and it is unlikely to end with it,” Ole Hansen, a strategist at Saxo Bank A/S, wrote in a note. “Instead, the Greenland episode has poured fresh fuel on a rally that has been building for months, driven by a macro and geopolitical backdrop that has become increasingly uncomfortable for investors reliant on financial assets alone.”

Gold rose 0.9% to $4,714.50 an ounce as of 2:56 p.m. in Singapore, while silver fell 0.5% to $93.9475 an ounce. The Bloomberg Dollar Spot Index was flat after losing 0.3% on Monday. Platinum was little changed, while palladium declined.

Investors will also be keeping close tabs on the US Supreme Court’s argument on Trump’s effort to fire Fed Governor Lisa Cook, which is due Wednesday and could be pivotal for the central bank’s continued independence.