Gold and silver hit record highs as markets reel from Trump’s latest tariff threat

Gold and silver prices have hit record highs and European stock markets have fallen, after the US president, Donald Trump, threatened to impose additional tariffs on eight European countries in an increasingly aggressive attempt to claim Greenland.Gold rose 1.6% to $4,666 an ounce on Monday morning, after reaching an all-time high of $4,689, as investors turned to safe-haven assets. US gold futures for February gained 1.7% to $4,671.90.Silver climbed to a record high of $94.08 an ounce, before easing to $93.15, up 3.6%.Stock markets across Europe fell on opening. France’s Cac 40 fell 1.6%, Germany’s Dax was down 1.4% and Spain’s Ibex 35 dropped nearly 1%. In London, the FTSE 100 was 0.3% lower.Carmakers were hit hard, with Volkswagen, BMW and Mercedes-Benz falling between 2.5% and 4%, while the Peugeot owner, Stellantis, dropped 2%.US markets were closed on Monday for Martin Luther King Jr Day, but US tech stocks listed in Europe also declined. Shares in the Google owner, Alphabet, listed in Frankfurt, fell 2.4%, while Nvidia and Microsoft were down 2.2%.On Saturday, Trump threatened to impose a 25% tariff on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland until the US was allowed to buy Greenland, marking an extraordinary escalation in the president’s campaign to claim the autonomous Danish territory.Greenland prime minister joins protests over Trump threats – videoIn a lengthy post on Saturday on Truth Social, Trump said he would impose a 10% tariff beginning on 1 February “on any and all goods sent to the United States of America”.Trump said the tariff would be “payable until such time as a Deal is reached for the Complete and Total purchase of Greenland”, rising to 25% on 1 June.The move pushed the dollar down by 4% against the Swiss franc and 0.2% against the Japanese yen, both considered safe-have currencies.EU ambassadors are preparing retaliatory measures should Trump follow through on the tariff threat.Matt Simpson, a senior analyst at the global financial services firm StoneX, said: “With Trump throwing tariffs into the mix, it is clear that his threat to Greenland is real. Geopolitical tensions have given the gold bulls yet another reason to push it to new highs.”Kathleen Brooks, a research director at the broker XTB, said: “Stocks in Asia are lower across the board, and European and US equity market futures are lower at the start of the week. Gold and silver are surging and both reached record highs this morning, and the dollar is broadly lower – all signs that markets are gripped by risk aversion as we wait to see how the Greenland situation plays out.”Brooks said this was a “big week for markets, and it hinges on Donald Trump’s tone at Davos. If he increases pressure on Europe to let him have control of Greenland, then we do not think that the benign market environment and low volatility – which is still well below the 12-month average – can persist as we move through January.”