Gold hits new record high as trade fears escalate
Gold prices surged on Monday, opening with a price gap up and reaching new record highs. This surge was driven by increased demand for safe-haven assets following US President Donald Trump's announcement of his intention to impose new tariffs on several European countries, reigniting fears of escalating global trade tensions.
Gold Prices Today
Gold prices jumped more than 2% to a new all-time high of around $4,690 per ounce, as investors flocked to the precious metal as a safe haven amid rising political and economic uncertainty.
New Tariffs Threaten Trade Relations
US President Donald Trump announced on Saturday the imposition of a 10% tariff on imports from eight European countries, effective February 1st, due to political disputes over what Trump described as US control of Greenland.
Trump indicated that this percentage could rise to 25% by June 1st if a final agreement is not reached regarding what he called the “complete and final acquisition” of Greenland by the United States, a move that sparked widespread concern in European markets.
Europe Awaits Countermeasures
This American announcement triggered strong reactions in Europe, where European leaders are expected to hold an emergency meeting in the coming days to discuss response options, including potential retaliatory measures. This has heightened investor fears of a new trade dispute that could impact global economic growth.
Factors Supporting Gold's Continued Rise
This record rise in gold prices comes amidst a strong upward trend since the beginning of the year, extending the remarkable performance the precious metal witnessed in 2025. This trend is supported by several factors, most notably:
- Continued political instability in Venezuela
- Renewed concerns about the independence of the US Federal Reserve
- Expectations of further interest rate cuts in the United States
- Central banks increasing their gold holdings
The outlook remains positive for gold to continue its upward trajectory this year, driven by increased demand from both individual and institutional investors. For the first time since 1996, gold reserves held by global central banks have surpassed those of the US Treasury, a clear indication of a shift away from dollar-denominated assets and a strengthening of geopolitical risk hedging strategies.
Silver Poised for Better Performance
On the other hand, forecasts suggest that silver prices may perform relatively better in the coming period, given the convergence of structural supply shortages and strong industrial demand, which supports the generally positive outlook for precious metals.
Future Outlook
With escalating global trade tensions, continued political uncertainty, and central banks increasingly turning to gold, the outlook for the yellow metal remains supportive of further gains, as markets await any new developments in US trade policy and international relations.
