Gold surged to new records, close to $4,900 an ounce, as pressure ramps up over escalating Greenland trade tensions. The safe-haven precious metal started 2025 below $3,000/oz, putting its gains at 70% in barely a year, an unprecedented rally.
Gold spot prices are trading at $4,860 at 9am UK time, while gold futures have jumped almost 5% in a week.
Tough session for US stocks
While gold soars, Wall Street’s major equity indices took a battering overnight as investors run for cover, reigniting the ‘Sell America’ trade.
Donald Trump has insisted there is ‘no going back’ on Greenland, citing security concerns in the Arctic, and has threatened tariffs against European nations.
US markets plunged overnight
| S&P 500 | -2.06% |
| Nasdaq Composite | -2.39% |
| Dow Jones Industrial Average | -1.76% |
Source: Investing.com
French President Emmanuel Macron said Europe would not bow to ‘bullies’, stressing that respect and cooperation, not coercion, should define relations between allies.
His remarks, delivered on the sidelines of the World Economic Forum in Davos, underscored growing unease in Europe over Washington’s rhetoric and trade threats tied to the Greenland dispute.
Impact of weakening dollar
Investor demand for gold was further boosted by weakness in the US dollar, which slid about 0.8% on Tuesday to a two-week low.
A softer dollar makes gold cheaper for holders of other currencies and typically lifts demand for the non-income paying metal.
Looking ahead, expectations for global interest rate cuts could play a pivotal role in shaping gold’s next phase. Easing monetary policy often weighs on currencies while improving gold’s relative appeal as a store of value.
As central banks move at different speeds, shifts in currency strength may become just as important as movements in the US dollar gold price itself.
Other precious metals are also trading at or near record levels, including silver and platinum, hitting $95.87/oz on Tuesday, and $2,519.51/oz on Wednesday, respectively.
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