Havens Rally on Greenland Worries – Gold Surges to Fresh Record Close at $4,670
US markets were closed overnight for a bank holiday, but that did little to prevent a strong market reaction to President Trump’s renewed push to take control of Greenland. Despite the lack of US cash equity trading, global markets adopted a more defensive tone as geopolitical risks moved back into focus, with S&P 500 and Nasdaq futures both dropping over 1.2%. The US dollar initially spiked higher before reversing course, finishing the session down 0.35% at 99.04 against the major currencies as safe-haven flows dominated. Oil prices were relatively quiet; Brent crude edged 0.05% higher to $64.16, while WTI was unchanged due to the US holiday. Gold was the clear beneficiary, surging 1.62% to settle at a fresh record high of $4,670.89, supported by heightened geopolitical uncertainty and ongoing demand for defensive assets.
Gold Hits New Highs Again
Gold surged to fresh highs again in trading yesterday as investors once again piled into haven assets, with the threat of a US–European trade war over Greenland looming for markets. President Trump has threatened to impose 10% tariffs on eight European countries by February, with an increase to 25% by June if they continue to block his push to take control of Greenland. The reaction has been strong from the nations, and investors are concerned that the situation could escalate into a full-blown trade war. Gold traders are expecting to see more moves in the world’s favourite haven trade, with further escalations likely to see it push for more fresh highs and any calming likely to see some sharp corrections.
Economic Calendar Ramps Up Today and US Markets Return
It is a busier day ahead on the economic calendar, with key data due during the Asian and European sessions and a heavy focus on central bank commentary later in the day from the World Economic Forum in Davos. US markets are set to reopen, which could see volatility pick up as traders re-engage following the holiday break. In the Asian session, attention will be on China’s 1-year and 5-year Prime Loan Rate, with no change firmly expected and the rates to remain at 3.00% and 3.50%, respectively. The European session brings a cluster of UK labour market data, with Claimant Count Change (exp 15.6k) and the Unemployment Rate (exp 5.1%) due out early in the piece, followed by a speech from Bank of England Governor Andrew Bailey when he testifies in front of the Treasury Select Committee later in the day. US markets will return for the New York session, and while there is little in the way of data scheduled today, we do hear from some central bank heavy hitters when they speak from the WEF Annual Meeting in Davos. Both Swiss National Bank Chairman Martin Schlegel and Buba President Joachim Nagel are scheduled today.
