Fear Markets, Gold Rises Unabated
Gold prices hit another record high, while silver held near its all-time high. This rise was driven by two major factors: the escalating Greenland crisis and turmoil in the Japanese government debt market, which sent investors rushing to safe havens.
In Davos, US President Donald Trump showed no signs of backing down from his plan to take over the Arctic island. The situation further heightened market tensions after Greenland's Prime Minister urged the public to prepare for the possibility of a military invasion—though he insisted the scenario was remote. Amid the tensions, the spot price of gold briefly reached $4,781.19 per ounce.
The US also threatened to impose tariffs on eight European countries—including Germany, France, and the UK—that oppose the planned takeover of Greenland. This threat rekindled the threat of a trade war that could damage growth, prompting investors to reduce risky positions.
The war of words in Davos further underscored the rapidly deteriorating relations between the US and Europe. French President Emmanuel Macron criticized Trump's trade policies, arguing that Europe needed to strengthen its sovereignty to avoid "vassalization and blood politics." Canadian Prime Minister Mark Carney even called the rules-based international order “effectively dead.”
From a market perspective, these tensions have shaken confidence, pressured the dollar, and boosted demand for safe havens like precious metals. The situation was further exacerbated by the Japanese government bond meltdown, which highlighted major economies’ fiscal concerns and fueled the debasement trade—investors moving away from their currencies and government bonds.
Daniel Ghali, senior commodity strategist at TD Securities, said the troubles in Japan are fueling “market-driven debasement fears” across the globe. He believes the gold rally is about confidence: “For now, confidence is bent but not broken—if it does, the momentum could last longer.” At 7:59 a.m. Singapore time, spot gold rose 0.3% to $4,775.40, while silver rose 0.3% to $94.8940. The Bloomberg Dollar Spot Index fell 0.1% after falling 0.5% in the previous two sessions, while platinum fell slightly and palladium remained flat.
Source: Newsmaker.id
