Precious metals markets recorded an unprecedented surge in trading today, with gold and silver prices soaring to new record highs, driven by a wave of buying from investors seeking safe-haven assets. This strong rally comes amid a sharp escalation in geopolitical tensions following explicit threats by US President Donald Trump to impose additional punitive tariffs on European countries over the ongoing dispute regarding Greenland.
Record numbers for the yellow metal
Today's trading session witnessed dramatic movements, with gold futures for February delivery surging 1.75%, gaining approximately $80.60 to settle at $4,676 per ounce. The precious metal touched $4,698 during the session, its highest level ever recorded for the most actively traded futures contracts, reflecting the prevailing anxiety in global markets.
In spot trading, gold rose 1.6% to $4,669.15 an ounce, after hitting a record high of $4,689.39 earlier in the session, confirming its appeal as a key hedge against political and economic risks.
Silver is catching up, and currencies are affected
Gold wasn't alone in this surge; silver also saw significant gains, with March futures rising 5.3% to $93.24 an ounce, after hitting a record high of $94.365. The spot price of silver also increased by approximately 3.5%, reaching $93.29 an ounce.
In contrast, these tensions cast a negative shadow on the US currency, as the dollar index, which measures its performance against a basket of six major currencies, fell by 0.25% to close at 99.16 points, providing additional support for dollar-denominated commodity prices.
Why gold now? (Economic context)
These strong movements in the metals markets are explained by gold's nature as a traditional "safe haven" that investors turn to during times of crisis and uncertainty. Historically, trade tensions between major economic powers (such as the United States and the European Union) are linked to fears of slowing global economic growth and rising inflation, prompting capital to flee volatile stock and currency markets and seek refuge in tangible assets that preserve value.
Repercussions of the trade dispute
The threat of new tariffs evokes memories of trade wars, which typically disrupt global supply chains and drive up production costs. This bleak outlook reinforces the likelihood of continued upward momentum for precious metals, as analysts believe that the ongoing dispute over Greenland, without a swift diplomatic resolution, could push gold to test new psychological levels beyond $4,700, as markets seek much-needed stability.
