Gold tops $4,700 an ounce on Greenland crisis

Gold prices surged past $4,700 an ounce, setting a fresh record high, as the Greenland crisis stoked fears of a potential trade war between the US and Europe. Silver also moved above its record high.

As of 3:14 p.m. Singapore time on the 20th (local time), gold was up 1% at $4,716.06 an ounce, marking an all-time high. Silver traded at $94.3405. Platinum and palladium also rose.

Concerns over a US-Europe trade war intensified after President Donald Trump threatened to impose tariffs on eight European NATO allies that had voiced opposition to taking control of Greenland. On the day, Trump also threatened to slap 200% tariffs on French wine after France said it would not take part in a Gaza peace commission he is leading.

As tensions between the US and Europe escalated, selling accelerated in US assets such as Treasuries and the dollar, while demand for safe havens such as gold and the Swiss franc strengthened. Beyond worsening geopolitical frictions, gold and silver also gained as Trump stepped up attacks on the Federal Reserve, emerging as preferred safe-haven assets over US Treasuries and the US dollar.

Markets are also watching developments at the Davos forum, after Trump said he would meet with multiple parties to discuss his plan to take control of Greenland.

French President Emmanuel Macron is expected to request activation of the European Union’s anti-coercion instrument, but German Chancellor Friedrich Merz said he is persuading Macron to lower the level of response.

In an interview with Bloomberg TV, Peter Kinsella, head of global FX strategy at Union Bancaire Privee, said, "We have entered an era of resource nationalism among major powers." He added that currencies are not the best way to play geopolitical themes and that gold remains an attractive investment.

Ole Hansen, a strategist at Saxo Bank, wrote in a report that "the Greenland crisis has provided fresh fuel to a precious-metals rally that has been running for months."

Investors are also closely watching the US Supreme Court’s hearing on the 21st on Trump’s bid to remove Fed Governor Lisa Cook. The hearing could have a significant impact on preserving the Fed’s independence.