Gold and Silver Reach Record Levels After Trump's Threat of Tariffs on Europe

SadaNews - Gold and silver prices soared to record levels as U.S. President Donald Trump's efforts to acquire Greenland intensified, raising fears of damaging trade wars between the United States and Europe.

Gold was traded in spot markets near $4,660 per ounce, while silver jumped by up to 4.4%, pressured by Trump's escalation against the dollar and increased demand for safe-haven assets.

The United States intends to impose tariffs on eight European countries, including France, Germany, and the United Kingdom, which oppose the Greenland acquisition plan. The tariffs, starting at 10%, will commence on February 1, rising to 25% in June.

European leaders are scheduled to hold an emergency meeting in the coming days as they consider potential countermeasures. Member states are exploring various options for response, including retaliatory tariffs on American goods worth €93 billion ($108 billion), according to sources familiar with the discussions.

French President Emmanuel Macron may request the activation of the EU’s "Anti-Coercion Tool," as reported by Bloomberg. This tool is the bloc's most potent retaliatory means, allowing it to deploy a wide range of measures in response to coercive trade actions.

Deeper Geopolitical Tensions and Strong Momentum for Precious Metals

Charu Chanana, Senior Investment Strategist at Saxo Markets in Singapore, stated that tensions related to Greenland differ from last year’s "Tariff Day" as they "indicate a deeper geopolitical rift." She added: "Using tariff threats within the alliance poses a trust shock that could leave a more embedded risk premium," referencing NATO.

Precious metals have recorded sharp gains this year, following strong increases in 2025, after the United States arrested Venezuela's president and intensified its acquisition threats over Greenland.

The Trump administration also renewed its attacks on the Federal Reserve, exacerbating concerns about the central bank's independence and enhancing what is known as "currency devaluation trading," as investors avoid currencies and government bonds due to concerns about debt levels.

Additional Momentum for the Upward Trend

A broader shift toward metals, led by investors in China, has added further momentum to the upward trend in gold and silver. Holdings in gold-backed exchange-traded funds (ETFs) rose by 0.9% last week, the largest increase since September, and have risen in seven of the past eight weeks.

Many analysts anticipate these strong gains to continue, with Citigroup predicting last week that gold could reach $5,000 per ounce in three months, and silver could reach $100.

Kyle Rodda, an analyst at Capital.com in Melbourne, stated, "Geopolitical risks continue to escalate. The new trade uncertainty undermines growth prospects, and U.S. foreign policy weakens confidence in the U.S. dollar. It's a perfect combination for gold and silver."

Spot gold rose by 1.4% to $4,658.31 per ounce at 10:44 a.m. in Singapore, after earlier reaching a peak of $4,690.59.

Silver increased by 3% to $92.8419, touching a high of $94.1213. Platinum also rose, while palladium declined. The Bloomberg spot dollar index dipped by 0.1%.

Investors will closely monitor the U.S. Supreme Court hearing on Trump’s attempt to remove Federal Reserve Board member Lisa Cook, scheduled for Wednesday, which could be crucial for the issue of central bank independence.