Safe-haven demand accelerates
Gold and silver rallied sharply to new all-time highs as fears of a widening trade war between the U.S. and Europe intensified, driven by tariff threats linked to Greenland.
- Gold climbed as high as $4,700 per ounce
- Silver surged more than 4%, briefly approaching $94 per ounce
The rally reflected growing investor demand for safe-haven assets as geopolitical risk increased and confidence in the U.S. dollar weakened.
Tariff Threats Spark European Backlash
The U.S. announced plans to impose tariffs on eight European countries that oppose its stance on Greenland:
- 10% tariffs set to begin February 1
- 25% tariffs scheduled for June if no agreement is reached
European leaders are actively discussing retaliation, including levies on approximately €93 billion ($108 billion) worth of U.S. goods.
Officials across Europe warned that escalating trade threats could damage transatlantic relations and trigger a prolonged economic standoff.
Why Precious Metals Are Reacting So Strongly
Analysts point to several forces driving the surge in gold and silver:
- Rising fears of a U.S.–EU trade war
- Weakening confidence in the U.S. dollar
- Inflationary risks tied to tariffs and fiscal policy
- Growing concerns over central bank independence
- Heightened geopolitical instability
One market strategist described the situation as a “trust shock” within Western alliances, noting that tariff threats inside long-standing partnerships carry longer-lasting risk premiums.
ETF Flows and Global Demand Add Fuel
Investor flows have reinforced the rally:
- Gold ETFs added over 28 metric tons in a single week
- Holdings have risen in seven of the last eight weeks
- Strong participation from Asian investors accelerated the move
Major banks are now openly forecasting further upside, with some projecting gold at $5,000 per ounce and silver approaching $100 in the near term.
Market Snapshot
- Gold: ~$4,668 per ounce
- Silver: ~$93 per ounce
- Dollar Index: Down ~0.2%
- Platinum & Palladium: Also trending higher
Investors are now watching closely for legal and policy developments that could further impact confidence in monetary institutions.
WSA Take
This rally isn’t just about metals — it’s about trust.
Tariff threats tied to geopolitics are pushing investors away from currencies and toward hard assets at an accelerating pace. When trade policy becomes a negotiating weapon inside alliances, gold and silver stop behaving like commodities and start acting like insurance.
If these tensions persist, record prices may prove to be a floor — not a ceiling.
Read our recent coverage on EU Considers $108 Billion in Counter-Tariffs.
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Disclaimer
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