Gold and Platinum Reach Record Levels Amid Rising Trade Tensions

SadaNews - Gold and platinum have reached new record levels, while silver nears its highest ever price, supported by demand for safe havens due to the worsening crisis related to Greenland and the collapse of the Japanese debt market.

US President Donald Trump, who is in Switzerland for the World Economic Forum in Davos, showed no signs of backing down from his pursuit of acquiring Greenland. This prompted the Prime Minister of the Arctic island to warn residents of a potential military invasion, although he added that this scenario was unlikely.

Gold surged in spot trading to a record level of $4849.73 per ounce, while platinum reached its all-time high at $2511.10 per ounce before retracting. Silver was nearing the $94 mark.

Trade and Political Tensions Support Prices

The United States threatened to impose tariffs on eight European countries, including Germany, France, and the United Kingdom, that opposed Trump's plan to acquire Greenland, raising the specter of a devastating trade war.

French President Emmanuel Macron attacked Trump's trade methods, stating that Europe needs more sovereignty to avoid "dependency and blood politics," while Canadian Prime Minister Mark Carney remarked that the rules-based international system is virtually dead.

The war of statements in Davos highlighted the rapid deterioration of the relationship between the traditional allies, the United States and Europe, shaking financial markets, putting pressure on the dollar, and boosting demand for safe havens like precious metals.

Monitoring the Japanese Debt Markets

In a separate context, the collapse of the sovereign debt market in Japan has underscored concerns about the financial conditions of major economies, a phenomenon that has fueled what is known as "currency devaluation trading," as investors shy away from currencies and government bonds.

Daniel Ghali, Senior Commodity Strategist at TD Securities, wrote in a note that the situation in Japan is fueling "fears of a market-led erosion in other parts of the world." He added: "The rise in gold is related to confidence. Right now, confidence is bent but not broken. If it breaks, the momentum will continue longer."

Gold prices in spot trading reached $4839.21 per ounce, up 1.6% as of 12:12 PM Singapore time, while platinum fell 1.3% to $2443.31 after previously rising by as much as 1.5%. The Bloomberg Dollar Spot Index remained stable after declining 0.5% over the previous two sessions.