Gold and Silver Shine as Trump’s Tariff Threat Spooks Markets

Reuters, BBC, and CNBC contributed to this report.

Gold and silver stole the spotlight on Monday, surging to fresh record highs as investors rushed for safety after US President Donald Trump reignited trade-war fears with a new tariff threat aimed squarely at Europe.

Gold briefly touched an all-time high of $4,689.39 an ounce, while silver powered its way up to nearly $94 an ounce, levels few would have imagined even a year ago. The jump came as markets digested Trump’s weekend announcement that the US will slap a 10% tariff on goods from eight European countries starting Feb. 1 – with the threat of a hike to 25% if those countries don’t back down over Greenland.

The targets include some of America’s closest allies: Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland. Trump said the tariffs would stay in place until a deal is reached over Greenland, a self-governing Danish territory he has repeatedly said the US should control.

Whenever geopolitics get messy, investors tend to reach for familiar shelters – and precious metals top that list. Gold and silver are seen as classic “safe haven” assets, and both have been on a tear for months.

Gold jumped more than 60% last year, driven by global tensions, economic uncertainty, expectations of interest-rate cuts and heavy buying by central banks. Silver has had its own tailwinds, including supply concerns after China imposed export restrictions on the metal.

“Gold has hit fresh record highs on its glittering run upwards,” said Susannah Streeter, chief investment strategist at Wealth Club. “It’s looking even more attractive as worries spread about aggressive US trade and geopolitical policies.”

While metals glittered, equities did not. European stock markets broadly fell as investors worried that the Greenland dispute could morph into a full-blown transatlantic trade war.

London’s FTSE 100 closed nearly 0.4% lower, while the more domestically focused FTSE 250 dropped about 0.9%. Across the continent, losses were sharper. Germany’s DAX slid 1.3%, with carmakers BMW, Mercedes-Benz and Volkswagen all down between 2% and 3%. France’s CAC 40 sank 1.8%, dragged lower by luxury heavyweights like LVMH and Hermès.

The auto, tech and luxury sectors took the brunt of the selling, reflecting fears that tariffs would hit globally integrated supply chains hard. One pocket of strength: defense stocks. Shares in Germany’s Rheinmetall and France’s Thales moved higher as investors bet on rising military spending amid growing geopolitical tension.

Gold miners also bucked the trend, with companies like Fresnillo and Endeavour benefiting directly from soaring metal prices.

Reports suggest the European Union is weighing a €93 billion package of retaliatory tariffs on US imports if Trump follows through. That raises the specter of a tit-for-tat escalation – something markets hate.

“Fears that a hard-fought trade deal between Europe and the US might now be off the cards contributed to significant falls across European indices,” said Danni Hewson, head of financial analysis at AJ Bell.

Complicating matters further, the US Supreme Court is expected to rule soon on whether Trump overstepped his authority in imposing some tariffs under emergency economic powers. A decision could come as early as Tuesday – and could either calm or further jolt markets.

Trade tensions remain one of the biggest risks hanging over the global economy. The International Monetary Fund recently described global growth as “steady,” but warned that a flare-up in trade disputes could quickly derail that outlook.

For now, investors are voting with their wallets – piling into gold and silver while trimming exposure to riskier assets. As long as tariff threats, geopolitical brinkmanship and economic uncertainty dominate headlines, precious metals look set to keep their shine.