Gold and silver prices at historic levels
Gold and silver have hit new record highs just days after breaking previous records, as investors flee to safe havens as the geopolitical and economic outlook worsens sharply. Today, the price of gold for February delivery rose 1.71% to $4,674.20 an ounce (about 31.1 grams), while the spot price of gold rose to $4,668.14, CNBC reports.
Greenland as a cause for tariffs in Europe
This unprecedented increase came after US President Donald Trump announced the imposition of tariffs on goods from eight European countries. The tariffs will remain in place until an agreement is reached for the “full and absolute purchase of Greenland.” Trump is further intensifying his rhetoric regarding the annexation of the Arctic island, which directly affects European stability.
George Cheveley of investment house Ninety One emphasizes that the rise in the price of gold is based on strong fundamentals. “With real interest rates expected to fall and central banks continuing to diversify their reserves, we see more reason for further growth than for selling,” their forecasts for 2026 say. Margins at current prices are expected to be four to five times higher than in 2024.
Silver follows this trend; its price rose by 5.06% to a record $93 per ounce, while the spot price reached $93.16.
Geopolitical chaos
Markets were shaken by a series of aggressive moves from the US:
Conflict in Ukraine: The war continues with no signs of a quick resolution, while Gaza's recovery is estimated to take years.
A blow to the European automotive and luxury industries
European stock markets fell on Monday morning. Shares of Europe's largest automakers and major luxury brands fell after the tariff announcement.
Tariff plan: Trump plans to impose 10% tariffs starting February 1, which will increase to 25% starting June 1 if Denmark and Europe do not agree to a deal on Greenland.
Index decline: The automotive industry index (Stoxx Europe 600 Automobiles & Parts) fell by 2.2%, while the luxury goods index fell by 2.9%.
European countries are reportedly already considering retaliatory tariffs and broader economic countermeasures against the US.
Pressure on the Federal Reserve
Adding to the turmoil is the Justice Department's criminal investigation into Federal Reserve Chairman Jerome Powell, which investors fear is part of Trump's plan to force the central bank to drastically cut interest rates.
While precious metals rose on uncertainty, copper and other industrial metals saw gains driven by demand for energy infrastructure and data centers, with prices at $5.86 an ounce.
