Gold and silver reach record highs amid escalating U.S.–EU tensions

Gold and silver are climbing to record levels as fears of a severe trade war between the United States and Europe intensify, driven by President Donald Trump’s push to take control of Greenland. The rising tension is boosting demand for safe-haven assets and weighing on the U.S. dollar.

Spot gold is trading around $4,660 per ounce, while silver is up as much as 4.4%, supported by a weaker dollar and increased demand for safe investments. The United States is planning to impose tariffs on goods from eight European countries, including France, Germany, and the United Kingdom, which have opposed the idea of acquiring Greenland. The tariffs are set at 10% from February 1 and are scheduled to rise to 25% in June.

European leaders are preparing an emergency meeting in the coming days to discuss possible retaliatory measures. Options under consideration include counter-tariffs on U.S. goods worth €93 billion. According to Bloomberg, French President Emmanuel Macron may seek to activate the EU’s anti-coercion instrument, the bloc’s most powerful mechanism for responding to trade pressure.

According to Charu Chanana, chief investment strategist at Saxo Markets in Singapore, the tension surrounding Greenland differs from last year’s tariff disputes because it reveals a deeper geopolitical fracture. The use of tariff threats within alliances such as NATO creates a “confidence shock” that could leave a lasting risk premium in markets.

Precious metals are extending their strong gains this year following impressive advances in 2025, also supported by concerns over the independence of the Federal Reserve amid increasing pressure from the Trump administration. This is fueling the so-called debasement trade, in which investors shun currencies and government bonds due to worries about debt and monetary stability.

Additional momentum is coming from a broader rotation into metals, led by investors in China. Gold ETFs increased their holdings by 0.9% last week, the strongest weekly rise since September, and have posted gains in seven of the past eight weeks.

Many analysts expect the rally to continue. Citigroup forecasts gold reaching $5,000 per ounce within three months, while silver is seen climbing to $100. “Geopolitical risks are rising, trade uncertainty is undermining growth prospects, and U.S. foreign policy is eroding confidence in the dollar — this is an ideal environment for gold and silver,” said Kyle Rodda of Capital.com.

During Asian trading, spot gold rose 1.4% to around $4,658 per ounce after earlier touching a high of $4,690. Silver gained about 3% to nearly $93, while the Bloomberg Dollar Spot Index slipped 0.1%. Platinum advanced, while palladium remained under pressure.

Investors are also watching an upcoming U.S. Supreme Court hearing related to Trump’s attempt to remove Federal Reserve Governor Lisa Cook, a case that could prove pivotal for the central bank’s independence.

Source: Bloomberg Terminal