On Tuesday, gold prices escalated sharply, reaching unprecedented levels amid growing geopolitical uncertainty tied to the Trump administration's assertive stance regarding Greenland. At 13:02 ET (18:03 GMT), spot gold surged 1.8% to $4,762.47 per ounce, while February futures jumped 3.7% to $4,766.01 per ounce. Earlier in the session, spot gold peaked at a record $4,763.13 per ounce.
The rise in gold prices was driven by increased safe-haven demand as concerns grew over the necessity of Washington's intentions toward Greenland. Market participants exhibited widespread risk aversion, simultaneously selling U.S. dollars, further bolstering metal prices.
President Trump reaffirmed his desire for Greenland in an NBC News interview on Monday, even leaving open the possibility of deploying the U.S. military to acquire the island. These remarks intensified apprehensions about potential military actions, a sentiment amplified in January following the U.S.-led operation in Venezuela that resulted in the capture of President Nicolas Maduro.
Looking ahead, the U.S. president's attendance at the World Economic Forum in Davos, Switzerland, has attracted attention as he is expected to engage with several European counterparts amid these tensions.
Analysts at OCBC noted, "When U.S. foreign policy becomes more transactional, unpredictable, and sidesteps multilateral institutions, it undermines policy credibility and encourages diversification away from the U.S. dollar." In this climate, the appeal of precious metals like gold is fueled less by protracted conflicts and more by an atmosphere of geopolitical unpredictability and policy volatility.
Alongside gold, silver has also experienced significant advances this year. Traders, facing global uncertainty, have reduced exposure to speculative assets, redirecting investments toward tangible assets such as precious metals. This reallocation supported a broad rally in metals through late 2025.
Year-to-date, gold has appreciated approximately 8%, while silver has soared roughly 30%, extending on an already strong performance this year. ING analysts attributed these movements to several geopolitical shocks, including the U.S.'s arrest of Venezuela’s leader and unresolved issues regarding Greenland.
Spot silver rose by over 0.3% to $94.65 per ounce, hitting a new record, while spot platinum increased by more than 2.8% to $2,443.98 per ounce.
David Morrison, senior market analyst at Trade Nation, explained, "Geopolitical uncertainty has reignited demand for both gold and silver, which were already experiencing near-parabolic growth. Investor preference has shifted toward these metals as preferred havens, aided by recent weakening of the U.S. dollar. Silver's smaller market size, supply shortage concerns, and possible short squeeze narratives strengthen its bullish story. Despite technical indicators suggesting it is overbought, investors have capitalized on its rise to historic highs though should be cautious of mounting risks."
Other industrial metals also reflected increased appetite for physical assets, though with some downward pressure. For instance, London Metal Exchange benchmark copper futures fell 0.8% to $12,872 per tonne yet remained near recent all-time highs.
Additional market dynamics include President Trump's threats to impose tariffs on several European nations, which contributed to the weakening of the U.S. dollar and propelled widespread metals purchasing. Furthermore, supportive Chinese GDP data aligned with government targets, stabilizing demand expectations after mixed economic signals.
This multifaceted geopolitical and economic environment continues to influence safe-haven asset demand, market sentiment, and currency valuations across multiple sectors.
Contributing author: Ambar Warrick