Gold surged strongly at the start of the week in Asian markets, approaching $4,700 per ounce and setting fresh record highs, as hedging flows remained robust amid escalating trade tensions following U.S. President Donald Trump’s threats to impose tariffs on a group of European countries linked to the Greenland issue.
In the spot market, gold rose about 1.8% to trade near $4,675.55 per ounce by the close of the New York session, after touching an intraday record of $4,690.75. U.S. gold futures followed the same upward trajectory, gaining nearly 1.9% to settle around $4,681 per ounce.
This performance extends the rally that took hold last week, with gold continuing to post successive highs supported by two key drivers: growing bets that the Federal Reserve will pivot toward a more accommodative monetary stance in the second half of the year, and the renewed prominence of geopolitical and trade risks, which has prompted a broad repricing of hedging instruments.
Silver also joined the rally, jumping more than 4% to a new record high of $94.03 per ounce. The move reflects a blend of safe haven demand alongside structural support from silver’s industrial applications, particularly in the energy and technology sectors.
Meanwhile, the U.S. dollar came under pressure at the start of the week as investors pared back risk exposure following Trump’s sharper trade rhetoric toward Europe over Greenland. This shift redirected flows toward traditional safe haven currencies, notably the Japanese yen and the Swiss franc, highlighting a broadly cautious tone across global markets.
On the political front, Trump announced plans to impose 10% tariffs on imports from eight European countries starting February 1, with the possibility of raising them to 25% by June if negotiations over Greenland stall. The targeted nations include major economies such as France, Germany, and the United Kingdom, along with several Northern European states moves that have drawn strong reactions from European capitals and revived concerns over a widening transatlantic trade dispute.
These developments have further reinforced the appeal of precious metals, particularly in an environment marked by softer U.S. economic momentum and clearer signs of cooling inflation, which reduce the opportunity cost of holding non yielding assets. In addition, renewed tensions in the Middle East especially those involving Iran have added another layer of geopolitical risk, keeping gold and silver firmly at the forefront of hedging strategies in the period ahead.
In currency markets, the initial reaction saw sharp selling of the euro and the British pound, pushing both to multi week lows. As the session progressed, however, investors began reassessing the longer term implications of U.S. policy uncertainty, shifting pressure back onto the dollar itself. As a result, both the euro and sterling recovered part of their losses, while the dollar continued to weaken against safe-haven currencies.
This pattern is familiar to markets: past episodes of heightened political uncertainty emanating from the United States have often translated into a higher risk premium on the dollar rather than sustained weakness in counterpart currencies. That dynamic played out again with the greenback falling against the Swiss franc and the yen, although gains in the latter were capped by domestic factors in Japan, including expectations of broader fiscal stimulus amid the prospect of an early election.
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