Gold price hits historic high above $4,700 per ounce amid Greenland tensions
Gold prices rose sharply during trading on Tuesday, reaching new historic highs above $4,700 per ounce, as investors increasingly sought safe havens to hedge against geopolitical risks and global political turmoil.
Gold prices today
The price of gold rose to a new record high of around $4,725 per ounce, supported by market concerns following escalating tensions between the US and Europe over Greenland.
What are the reasons for gold's rise to record levels?
The sharp rise in the price of gold is due to several key factors:
- The geopolitical crisis in Greenland: US President Donald Trump expressed his interest in buying Greenland, describing it as "essential for national and global security," threatening to impose tariffs on eight European countries that oppose this move.
- Demand for safe havens: Traders are turning to gold as a safe haven to hedge against political risks and turmoil in global markets.
- Internal tensions in the US: Renewed attacks by the Trump administration on the Federal Reserve have raised concerns about the central bank's independence, supporting gold and silver prices.
- Influential international developments: French President Emmanuel Macron rejected Trump's invitation to join the proposed Gaza peace council, with France intending to activate the EU's anti-coercion mechanism.
The impact of the Greenland crisis on the world
US President Donald Trump's attempts to take control of Greenland have raised widespread fears of a potential trade war between the US and the European Union, especially after Washington threatened to impose tariffs on eight European countries that oppose the move.
Referring to the US interest in purchasing Greenland, Trump said on his Truth Social platform that the island is essential to national and global security, further exacerbating global political tensions.
Europe waits and safe havens benefit
Global markets are awaiting Europe's response to US threats to impose new tariffs, amid fears that retaliatory measures could cast a shadow over global trade and economic growth.
Investors are also monitoring developments at the World Economic Forum in Davos, where Trump announced his intention to hold meetings with several parties to discuss his plan for Greenland.
French President Emmanuel Macron also rejected an invitation to join Trump's proposed peace council for Gaza, in a move that reflected the widening gap in political differences.
French President Emmanuel Macron intends to call for the activation of the European Union's anti-coercion mechanism in response to US pressure, despite statements by German Chancellor Merz, who indicated that he would urge Macron to calm the European reaction and avoid escalation.
Gold benefits from market turmoil
The US threat to its NATO allies has increased financial market turmoil, boosting demand for safe-haven assets, chief among them gold, which continues to be seen as a strong investment option in times of uncertainty.
This crisis, which followed the US arrest of the Venezuelan leader, has also contributed to the sharp upward momentum in precious metal prices in recent times.
Federal Reserve An additional factor
alongside geopolitical tensions, gold and silver prices received further support from the Trump administration's renewed attacks on the Federal Reserve, which brought concerns about the independence of the US central bank back to the forefront. Investors are also awaiting the US Supreme Court's decision on Wednesday on legal challenges related to Trump's attempt to dismiss Federal Reserve Governor Lisa Cook, as this ruling is seen as a decisive factor in determining the future of the central bank's independence and its direct impact on gold movements in the coming period.
Ultimately, with geopolitical risks escalating, trade tensions mounting, and the debate over the independence of US monetary policy continuing, expectations remain supportive of continued strength in gold prices, with the possibility of new record highs in the medium to long term, and attempts to exploit any corrective declines to build up buying positions once again.
