New York, January 21, 2026, 06:11 (EST) — Premarket
- Spot gold jumped above $4,800, setting a new record in early trade
- Demand rises as tensions in Greenland persist and trade war worries mount, driving investors toward safer bets
- Focus turns to Trump’s remarks at Davos and a U.S. Supreme Court case concerning the Fed
Gold shot above $4,800 an ounce on Wednesday, pushing its record run further as investors sought safety amid rising U.S.-Europe tensions over Greenland. Spot gold jumped 2.1% to $4,861.38 by 1024 GMT, after hitting an intraday peak of $4,887.82; February U.S. gold futures gained 2% to $4,863.10. The metal has notched 11 fresh highs just this year. Jamie Dutta from Nemo.money flagged “the Greenland crisis” as a major factor, while SP Angel’s John Meyer predicts gold will “punch through $5,000/oz.” 1
The bid jumped again after President Donald Trump insisted there’s “no going back” on his effort to control Greenland, even leaving the door open to seizing the Arctic island by force. This flare-up has revived fears of a trade war, with European officials considering retaliation, including tariffs that will automatically resume on Feb. 6 once the suspension expires. 2
Trump is set to raise the Greenland issue again at the World Economic Forum in Davos on Wednesday, despite strong pushback from European leaders. Reuters describes this as the most serious strain on transatlantic ties in decades. Speaking to reporters, Trump said he plans to discuss Greenland while in Switzerland and added, “I think we will work something out where NATO is going to be very happy and where we’re going to be very happy.” 3
Gold extended its gains after Tuesday’s surge, when spot prices hit $4,765, setting a new record. U.S. futures shot up 3.7% following renewed tariff threats from Trump targeting Europe, which shook riskier assets. “Gold has surged deeper into uncharted territory as investors hedge against rising political risk,” said Fawad Razaqzada, market analyst at City Index and FOREX.com. Reuters reported that traders are pricing in two 25-basis-point rate cuts by mid-2026, while a softer dollar is also fueling the rally. 4
A weaker U.S. dollar tends to lift dollar-priced commodities by making them cheaper for those using other currencies. Gold gains too, since it doesn’t yield interest, so when rate expectations fall, the holding costs ease up alongside those rates.
Investors are zeroing in on a brewing clash in Washington tied to the Federal Reserve. On Wednesday, the U.S. Supreme Court will weigh in on whether Trump’s push to remove Fed Governor Lisa Cook is lawful. Treasury Secretary Scott Bessent warned that Fed Chair Jerome Powell showing up at the hearing would be a misstep, saying it risks dragging the central bank into politics. Critics counter that Trump’s move poses a direct threat to the Fed’s independence. 5
Putting the legal wrangling aside, Bessent said Trump could announce the next Fed chair “maybe as soon as next week” after narrowing down his shortlist. Leading names include Trump economic adviser Kevin Hassett, Fed Governor Christopher Waller, former Fed Governor Kevin Warsh, and BlackRock bond chief Rick Rieder. Powell’s current term as chair wraps up in May. 6
The recent surge has gold vulnerable to sharp declines if headlines fade or the dollar steadies. Investors are watching gold-backed ETFs for signs the buying frenzy could be cooling off after the recent jump.
All eyes turn to Trump’s remarks at Davos later Wednesday, as traders hunt for hints of a thaw on Greenland and trade disputes. The Supreme Court’s Cook hearing is also on deck that day, with investors watching closely for signals about Fed independence and the dollar’s next move.
