Gold and silver prices reached record highs on Monday as global stock markets declined following threats from U.S. President Donald Trump to impose new tariffs on eight European nations, escalating fears of a new trade war.
The dispute stems from failed negotiations over the United States’ proposal to purchase Greenland, an autonomous Danish territory. Citing “fundamental disagreement,” Trump announced his intention to levy 10 percent tariffs starting February 1 on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. He stated these tariffs would increase to 25 percent by June 1 if the countries did not agree to the takeover.
The targeted European nations issued a joint statement, warning that the “tariff threats undermine transatlantic relations and risk a dangerous downward spiral.” The move also jeopardizes a trade agreement signed last year between the US and the European Union. German Foreign Minister Johann Wadephul expressed doubt that the agreement could proceed “in the current situation.”
In response, aides to French President Emmanuel Macron indicated he would urge the EU to activate its “anti-coercion instrument” against Washington, a measure that could restrict imports of US goods and services into the 27-member bloc.
The prospect of a deepening trade conflict prompted investors to move toward safe-haven assets. Gold surged to a peak of $4,690.59, and silver hit $94.12.
Equity markets saw significant losses. In Europe, Frankfurt and Paris opened more than one percent lower, with London also declining. Asian markets, including Tokyo, Hong Kong, and Sydney, also retreated.
