Global gold and silver prices surged on Monday, reaching new heights as markets reacted to fresh trade tensions triggered by US President Donald Trump’s tariff threat.
Meanwhile, European shares fell, reflecting investor anxiety over possible disruptions to international trade.
Gold touched $4,689.39 an ounce, while silver climbed to $94.08 an ounce, marking record levels for both metals. The spike followed Trump’s warning that he would impose tariffs on several European nations opposing his plan to take over Greenland.
Investors often turn to precious metals during uncertain times, which explains the strong demand for gold and silver in recent months. The latest rise comes amid growing fears that the Greenland dispute could escalate into a wider trade conflict between the US and Europe.
On Saturday, Trump announced a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland, set to take effect on 1 February. He added that the rate could eventually increase to 25% and would remain until Greenland-related negotiations reached a conclusion.
Reports indicate the European Union is preparing a €93bn package of tariffs on US imports in response, further fueling concerns that tensions could intensify.
"The precious metal is holding even more allure as a safe haven as worries spread about the repercussions of the US aggressive trade and geopolitical policies," said Susannah Streeter, chief investment strategist at Wealth Club.
"Gold has hit fresh record highs on its glittering run upwards."
While metals climbed, European stock markets declined. London’s FTSE 100 fell nearly 0.4%, and the FTSE 250 dropped 0.9%, with financial and industrial firms taking the brunt of the losses. Gold mining companies, including Fresnillo and Endeavour, benefited from the surge in prices, posting gains in contrast to broader market trends.
Elsewhere in Europe, technology companies, carmakers, and luxury goods firms faced steep declines. Germany’s Dax index slid 1.3%, with BMW, Mercedes-Benz, and VW down by around 2% to 3%. France’s Cac 40 index lost 1.8%, with major luxury brands such as LVMH and Hermes falling sharply.
Defence stocks bucked the trend, rising as investors looked for more secure investments. Germany’s Rheinmetall and France’s Thales both traded higher amid the market uncertainty.
US markets were closed on Monday for a public holiday, limiting transatlantic market activity.
"Fears that a hard-fought trade deal between Europe and the US might now be off the cards contributed to significant falls across European indices," said Danni Hewson, head of financial analysis at AJ Bell.
Attention is now focused on the US Supreme Court, which will decide whether Trump overstepped his authority by imposing some tariffs under the International Emergency Economic Powers Act. A decision could be delivered as soon as Tuesday, potentially triggering another market reaction.
That "could bring another huge upset" if the court strikes down the tariffs, Hewson added.
Trade tensions remain a major threat to global growth, according to the International Monetary Fund. In its latest world economic outlook, prepared before the most recent tariff announcements, the IMF described the global economy as stable but noted risks including a slowdown in the AI boom and potential flare-ups in trade conflicts.
