LONDON, January 20, 2026, 13:24 GMT
Gold surged past $4,700 an ounce for the first time on Tuesday and hit a record $4,737.10, while silver held just below a fresh peak as investors ran for safety. Spot gold was up 1.2% at $4,726.86 by 1131 GMT and silver rose 0.7% to $95.308 after earlier touching $95.488, after U.S. President Donald Trump threatened new tariffs on eight European countries tied to Greenland. Gold has gained 9.6% in 20 days of 2026 and more than 70% since Trump’s second term began a year ago, and UBS analyst Giovanni Staunovo said tariff-driven growth fears and Trump’s push for lower U.S. rates were driving the move, adding: “We still see further upside… targeting $5,000/oz.” 1
The tariff threat is colliding with a political fight that has moved from social media into Davos meeting rooms and European capitals. Trump said there was “no going back” on his goal to control Greenland and did not rule out taking the Arctic island by force, while Denmark’s Prime Minister Mette Frederiksen warned parliament “the worst may still lie ahead”. The European Union is weighing a response that includes reviving tariffs on 93 billion euros of U.S. imports and potentially using its Anti-Coercion Instrument — a legal tool that can restrict access to contracts, investment and services trade. 2
European markets have treated it as more than noise, with investors watching Davos for any sign the row cools or spreads. The STOXX 600 fell 1.3% by 0925 GMT, while France’s CAC 40 dropped 1.2% and Germany’s DAX slipped 1.4%, Reuters reported. TD Cowen analysts said the shift was unusually serious and warned: “There’s no playbook for this.” 3
The risk-off move started on Monday, when global stocks slid and the dollar eased against the yen and Swiss franc after Trump laid out the tariff threat. Trump said he would impose additional 10% levies from February 1 on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, rising to 25% on June 1 if no deal on Greenland was reached, Reuters reported. Danske Bank’s Kristoffer Kjær Lomholt said investors were mindful that escalation could weigh on the dollar too, with a “‘Sell America’ narrative” still in the background. 4
In London, the FTSE 100 was down 1.1% at 1042 GMT and the FTSE 250 fell 1%, putting both on track for their steepest intraday falls since mid-November. Kathleen Brooks, research director at XTB, said what happens next will “depend on Trump’s actions” and called his comments at Davos this week “critical”. Precious metals miners rose as gold vaulted past $4,700 and silver hovered near record highs. 5
Gold and silver had already hit records on Monday, with spot gold at $4,666.65 and silver at $93.50 by 0739 GMT after touching $4,689.39 and $94.08, Reuters reported. StoneX senior analyst Matt Simpson said the flare-up gave “gold bulls yet another reason” to push the metal higher. OCBC strategist Christopher Wong said silver’s medium-term case stayed constructive on deficits and industrial demand, but warned the pace of the move “may warrant some near-term tactical caution.” 6
But markets are not unanimous that the tariff threat will land as written, and that is the main near-term risk for the metal rally. Jefferies strategist Mohit Kumar said investors had become used to “Taco from Trump” — shorthand for Trump backing down — and he expected the Feb. 1 deadline could be postponed. ING’s Carsten Brzeski said the talk still forces businesses into “another period of uncertainty” over investment and exports to the United States. 7
Rate expectations are the other moving part, because gold does not pay interest and tends to struggle when yields rise and the dollar firms. The dollar was poised for a third weekly gain last Friday after strong U.S. data pushed back expectations for the next Federal Reserve cut to June, Reuters reported. “The U.S. dollar is looking firmer to start the year,” Capital.com analyst Kyle Rodda wrote then. 8
