Gold and silver prices jumped significantly on Monday. This surge followed President Trump's announcement of new tariffs targeting European countries. The move has intensified global trade tensions and pushed investors toward traditional safe-haven assets.
Trump's Tariff Announcement Sparks Market Reaction
President Trump declared a 10% tariff on imports from eight European nations. This policy will start on February 1st. The affected countries include Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland.
Trump specifically linked the tariffs to Greenland. He stated the levies would increase to 25% by June 1st. They would remain until a deal is reached for what he termed the "complete and total purchase" of Greenland. Denmark holds sovereignty over the territory.
Precious Metals Reach New Highs
The geopolitical uncertainty immediately boosted precious metals. Spot gold rose by 1.4% to reach $4,658.82 per troy ounce. It even touched an intraday record high of $4,690.88 earlier in the session.
Silver experienced an even stronger rally. Spot silver climbed 3.2% to $92.99 per ounce. Analysts pointed to the tariff threat as a key driver. It created fresh demand for assets perceived as stable during times of crisis.
Analysts Warn of Escalating Tensions
Economic experts expressed deep concern. Two members of ING's analysis division commented on the situation. They said Trump's announcement has escalated trade tensions into a new dimension. This dimension appears driven more by political motives than economic logic.
"It is also pushing the long-standing transatlantic relationship into a severe crisis," ING added. The firm warned of clear risks for further escalation. Such escalation could bring negative consequences for both European and US economies.
Matt Simpson, a senior market analyst at StoneX, shared his perspective. "Geopolitical risks continue to build," he noted. Simpson questioned whether this represents a serious policy threat or merely another provocative comment. "But given the US kicked off the year with a hostile takeover of Venezuela, nothing can be ruled out for now," he concluded.
Other Markets Show Mixed Performance
The reaction across financial markets was varied. Other traditional safe-haven assets also gained strength. The Swiss franc and the Japanese yen both appreciated against the US dollar. The dollar fell 0.3% against the franc and edged 0.1% lower against the yen.
Asian stock markets presented a mixed picture. Japan's Nikkei Stock Average fell by 1.0%. Hong Kong's Hang Seng Index declined 0.7%. In contrast, China's Shanghai Composite Index rose 0.5%. South Korea's Kospi added 0.9%.
US stock futures pointed to a weaker opening. eMini Nasdaq 100 futures slid 1.1%. eMini S&P 500 futures were down 0.8%. This indicates investor caution ahead of the US trading session.
The situation remains fluid. Market participants are closely monitoring developments. Any further statements from the White House could trigger additional volatility. For now, precious metals continue to benefit from the climate of uncertainty.
