Gold Hits New Records Amid Deepening Greenland Crisis

Gold extended its record rally, fueled by the Greenland crisis and a sell-off in Japanese government debt, which boosted demand for safe-haven assets.

U.S. President Donald Trump, set to speak at the World Economic Forum in Davos, Switzerland, showed no signs of backing down from his intention to acquire the Arctic island. This prompted Greenland’s Prime Minister to warn citizens about a potential military invasion, though he emphasized that such a scenario remains unlikely.

Copper also joined the metals rally, climbing toward $13,000 per ton after Goldman Sachs forecasted continued capital flows into the U.S.—a key driver behind the industrial metal’s strong price gains.

The U.S. has threatened tariffs on eight European countries—including Germany, France, and the U.K.—that opposed Trump’s plan to take control of Greenland, raising fears of a destructive trade war. French President Emmanuel Macron sharply criticized Trump’s tactics, calling for greater European sovereignty to avoid “vassalization and blood politics,” while Canadian Prime Minister Mark Carney declared that the rules-based international system is effectively dead.

The verbal confrontation in Davos highlighted the rapid deterioration of relations among traditional U.S. allies, unsettling financial markets, pushing the dollar down, and increasing demand for safe-haven metals.

The Japanese sovereign debt sell-off also heightened concerns over fiscal stability in major economies, fueling the so-called “debasement trade,” where investors avoid currencies and government bonds.

Spot gold rose 2.4% to a record $4,878.22 per ounce on Wednesday, while silver hovered near $95 after hitting a historic peak on Tuesday. Platinum also reached a record $2,511.10 before retracing and trading nearly flat.

“The situation in Japan creates ‘fear of market-driven debasement elsewhere,’” wrote Daniel Gali, senior commodities strategist at TD Securities. “Gold’s rally is a matter of confidence. Trust is shaken, but not broken. If it breaks, momentum could continue longer.”

Gold is set to receive further support from the world’s largest reported buyer—the National Bank of Poland, which approved plans to purchase an additional 150 tons. Bolivia’s central bank also resumed purchases for its foreign exchange reserves under new regulations enacted in December 2025.

“Gold remains our highest-conviction asset,” said Daan Strøven, co-head of commodity research at Goldman Sachs, citing continued central bank buying. He confirmed Goldman’s base case that gold could reach $4,900 per ounce, with upside risks if private sector diversification expands.

Investors are also watching a U.S. Supreme Court hearing related to Trump’s attempt to remove Federal Reserve Governor Lisa Cook, while ongoing litigation over mortgage fraud allegations continues.

As of 14:23 Singapore time, spot gold was up 2.4% at $4,878.41 per ounce, platinum held at $2,473.99 after earlier gains of up to 1.5%, and the Bloomberg Dollar Spot Index remained flat following a 0.5% decline over the previous two sessions.

Source: Bloomberg Terminal