Gold and silver prices skyrocketed to all-time highs on Monday. This dramatic surge followed an announcement from US President Donald Trump. He revealed plans to impose new tariffs on eight European countries. These nations had opposed his controversial proposal to acquire Greenland.
Trump Announces Tariffs on Key European Allies
President Trump declared a 10% tariff on goods imported from several European countries. The list includes major economies like France, Germany, and the United Kingdom. This new tariff is scheduled to take effect on February 1st. It is then set to increase sharply to 25% by June. The immediate market reaction was one of deep concern. Investors fear this aggressive move could trigger retaliatory actions from Europe. Such a scenario might escalate into a full-blown global trade war.
Europe Considers Its Retaliation Options
European leaders are preparing a strong response. They have called for an emergency meeting in the coming days. The agenda is to explore and decide on possible counter-measures against the US tariffs. According to sources familiar with the discussions, member states are evaluating several options. One significant proposal involves imposing retaliatory levies. These would target American goods worth approximately €93 billion, which is about $108 billion.
French President Emmanuel Macron is reportedly considering a powerful tool. He may formally request the activation of the European Union's anti-coercion instrument. This mechanism represents the bloc's most potent legal weapon for retaliation. It is designed to respond to economic pressure from third countries.
Safe-Haven Demand Drives Precious Metals Rally
The threat of a trade conflict has sent investors scrambling for safety. Precious metals, traditionally seen as safe-haven assets, have benefited enormously. This year's sharp rally continues a powerful trend that began in 2025. That year saw dramatic gains after the US seized Venezuela's leader. The situation intensified with renewed threats to take control of Greenland.
Market anxiety has been compounded by other actions from the Trump administration. There have been renewed public attacks on the Federal Reserve. These criticisms intensify longstanding worries about the central bank's political independence. They also fuel what traders call the 'debasement trade.' In this strategy, investors avoid traditional government bonds and certain currencies. They do this due to mounting concerns over unsustainable public debt levels.
Record-Breaking Price Movements
The market data confirms the historic nature of the move. Spot gold climbed by a significant 1.7%. It reached a price of $4,676.22 per ounce during early Asian trading hours. Earlier in the session, it had hit a stunning peak of $4,690.59. Silver experienced an even more explosive surge. It jumped by 3.9% to trade at $93.6305. Its intraday high was recorded at $94.1213.
The rally was not confined to just gold and silver. Other precious metals also moved higher. Both platinum and palladium posted gains during the session. Meanwhile, the US dollar showed slight weakness. The Bloomberg Dollar Spot Index dipped by 0.1%, reflecting the shift in investor sentiment away from the currency.
The combination of geopolitical tension, trade policy uncertainty, and concerns over monetary policy has created a perfect storm. It is driving unprecedented demand for tangible assets like gold and silver. Market analysts warn that volatility is likely to remain high as the situation between the US and Europe develops.
