Gold surges to new record amid US-EU tensions

DAVOS

Gold prices shattered records on Wednesday, climbing above $4,850 per ounce for the first time, as geopolitical uncertainty fueled by U.S. President Donald Trump's tariff threats over Greenland drove investors toward safe-haven assets.

Silver also hit fresh highs near $96, underscoring the market's flight to precious metals amid fears of a broader trade war.

Asian stock markets stabilized after a turbulent start to the week, with mixed performances across the region. Tokyo's Nikkei fell 0.5 percent, while Hong Kong's Hang Seng edged up 0.3 percent and Shanghai's CSI 300 rose modestly by 0.2 percent.

U.S. futures pointed higher, offering some relief after Wall Street's major indexes plunged on Tuesday upon reopening after a holiday weekend.

The Dow Jones dropped 1.8 percent, the S&P 500 slid 2.1 percent, and the Nasdaq fell 2.4 percent in the prior session, reflecting global jitters.

The volatility stems from Trump's weekend announcement of up to 25 percent tariffs on goods from several European nations — including France, Germany, the U.K. and Denmark — for opposing the U.S. acquisition of Greenland.

European leaders have fired back, with French President Emmanuel Macron raising the possibility of deploying an unused, powerful instrument aimed at deterring economic coercion and EU Commission President Ursula von der Leyen calling the tariffs a "grave error" during remarks at the World Economic Forum in Davos.

U.S. Treasury Secretary Scott Bessent labeled potential EU countermeasures "unwise," heightening the standoff.

In Japan, bond yields eased after a sharp spike on Tuesday, triggered by Prime Minister Sanae Takaichi's pledge to slash taxes, including suspending an 8 percent sales tax on food and beverages for two years if she secures victory in the Feb. 8 snap election.

Finance Minister Satsuki Katayama urged market calm, citing robust tax revenues and reduced debt reliance, which helped yields retreat.

However, analysts warn that verbal interventions may not fully curb the momentum.

For Türkiye, the gold rally has amplified local market dynamics, where the metal serves as a traditional store of value amid economic volatility. Istanbul's Grand Bazaar saw gram gold prices soar to new highs around 3,200 Turkish Liras.

While Türkiye is not directly targeted by the tariffs, experts note potential spillover effects on global trade, which could pressure Turkish exports to Europe and the U.S., already strained by ongoing concerns.

The market's eyes were fixed on Trump's appearance at Davos later on Jan. 21, where his speech could either escalate or de-escalate the crisis.

"Traders are bracing for further volatility around Trump's Greenland ambitions and potential tariff escalations," said Chris Weston, head of research at Pepperstone.

Any hint of resolution — or retaliation — could sway sentiment overnight.

In his Davos speech, the White House said Trump wanted to focus on the U.S. economy amid a cost of living crisis that threatens his Republicans in the 2026 midterms.

But the U.S. president's extraordinary assertion of U.S. power on the world stage one year into his second term means Greenland will form the backdrop to the address.