Greenland Heats Up, Gold Sees a Refuge
Gold (XAU/USD) rallied sharply on Monday (January 19th) amid thin trading as US markets were closed for Martin Luther King Jr. Day, rebounding from last weekend's weakness and once again approaching the $4,700/ounce area. Prices hit a new high of $4,690/ounce before settling around $4,671/ounce, as the market entered risk-off mode and sought safe-haven assets amid escalating US-Europe trade tensions.
The main trigger came from the "Greenland drama." US President Donald Trump announced plans for 10% tariffs starting February 1st on goods from eight European countries—and threatened to escalate to 25% by June 1st if no agreement was reached on Greenland. This move immediately shook global sentiment: European stocks were depressed, while demand for safe-haven assets poured into gold and other precious metals.
From the European side, talk of a retaliatory response also added to the uncertainty. The European Union is reportedly discussing options ranging from activating the Anti-Coercion Instrument (ACI)—nicknamed the "bazooka"—to reconsidering a large-scale retaliatory tariff package. This combination of tariff threats and the risk of retaliation is causing the market to increase risk premiums and curb appetite for the dollar, allowing gold to remain supported near record levels.
Source: Newsmaker.id
