Gold prices surged to a record high above $4,800 per ounce on Wednesday, driven by strong safe-haven demand and a weaker U.S. dollar, as U.S. President Donald Trump’s renewed push to take control of Greenland raised fears of a fresh trade war with Europe and potential disruption within the NATO alliance.
Spot gold climbed 1.2 percent to $4,821.26 per ounce by 0226 GMT, after touching a record high of $4,843.67 earlier in the session. U.S. gold futures for February delivery rose 1 percent to $4,813.50 per ounce.
Kyle Rodda, Senior Market Analyst at Capital.com, said the rally reflected a loss of confidence in the United States following Trump’s recent actions. “It’s the erosion of trust in the U.S. caused by Trump’s moves over the weekend to impose tariffs on European countries and intensify pressure to take Greenland. The rise in gold reflects fears over growing global geopolitical tensions,” he said.
On Tuesday, Trump stated there was “no going back” on his objective of controlling Greenland, refusing to rule out the use of force and strongly criticising NATO allies. He later added, “We will work something out where NATO is going to be very happy and where we’re going to be very happy.”
Meanwhile, French President Emmanuel Macron said Europe would not give in to intimidation, sharply criticising Trump’s threat at the Davos forum to impose steep tariffs unless Europe allowed the U.S. to take over Greenland.
“Investors are clearly selling the dollar and U.S. Treasuries—especially long-term bonds—and turning to gold instead, because confidence in gold is currently higher than confidence in the U.S. currency,” Rodda added.
The U.S. dollar hovered near three-week lows against the euro and Swiss franc, while Asian stock markets extended losses for a third consecutive session. Although the global bond sell-off appeared to slow, sentiment remained fragile.
A weaker dollar typically supports demand for dollar-priced commodities by making them cheaper for overseas buyers.
The U.S. Federal Reserve is widely expected to keep interest rates unchanged at its January 27–28 meeting, despite repeated calls from Trump for rate cuts. Non-yielding assets such as gold tend to perform well in low-interest-rate environments.
In other precious metals, spot silver fell 1 percent to $93.59 per ounce after hitting a record high of $95.87 on Tuesday. Spot platinum slipped 0.7 percent to $2,445.96 per ounce after reaching a record $2,511.80 earlier in the day, while palladium declined 0.5 percent to $1,857.19.
Source: Reuters
