Gold Rises to Record Level Amid Transatlantic Trade Escalation

SadaNews - Gold prices have reached a new record level, while silver has fallen from its all-time high, fueled by U.S. President Donald Trump's efforts to acquire Greenland, raising concerns about the potential outbreak of a trade war between the United States and Europe.

The price of gold in spot trading rose to $4694.35 per ounce on Tuesday, as markets awaited the European response to Trump's threat to impose tariffs on eight European countries that opposed his ambitions regarding Greenland. Silver prices had previously hit a historic peak of $94.7295 per ounce before declining.

Market Concerns Over Washington's Hostile Tone

The United States' hostile tone towards its NATO allies has raised concerns in the markets, which has boosted demand for safe havens and revived what's known as "selling U.S. assets" trades.

French President Emmanuel Macron is expected to call for the activation of the European Union's tool to combat coercion, while German Chancellor Friedrich Merz said he is trying to convince him to soften his response.

The crisis, which came right after the United States arrested the leader of Venezuela, added further momentum to an already swift upward trend in precious metals markets.

Renewed attacks from Trump's administration on the Federal Reserve have also supported gold and silver this year, reviving concerns about the independence of the central bank.

Escalating Market Tensions

Oli Hansen, a strategist at Saxo Bank, wrote in a note: "The surge in precious metals did not begin with this dispute, and it is unlikely to end with it."

He added that "the Greenland issue has poured new fuel on a rally that has been building for months, driven by a macroeconomic and geopolitical background that increasingly unsettles investors relying solely on financial assets."

Gold prices rose 0.5% to $4692.15 per ounce at 12:52 PM Singapore time, while silver fell 0.2% to $92.2147 per ounce. The Bloomberg spot dollar index remained unchanged after falling 0.3% on Monday, while platinum and palladium prices declined.

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.