Asia stocks slide, gold and silver hit record highs on Trump’s Greenland tariff threat

Singapore - Most stock markets slid in Asia on Jan 19 while gold and silver jumped to new records after US President Donald Trump said he would impose tariffs on eight European nations that have

opposed his plan to take Greenland,

denting risk appetite and boosting demand for haven assets.

The US dollar also fell as investors piled into the safe haven yen and Swiss franc on concerns about what a possible trade war between the United States and Europe could mean for global growth and demand.

The greenback dropped 0.4 per cent against the Swiss franc to 0.7988 francs, and 0.2 per cent against the yen to 157.80.

Singapore’s Straits Times Index pared a 0.6 per cent drop in the morning to close down 0.3 per cent, Japan’s Nikkei lost 0.7 per cent and Hong Kong’s Hang Seng Index dropped 1.1 per cent.

China’s Shanghai Composite rose 0.3 per cent as data showed annual economic growth slowed to 4.5 per cent in the December quarter, though that still topped forecasts. South Korea’s Kospi index reversed earlier losses to close 1.3 per cent higher, led by a rally in automakers on optimism around artificial intelligence and robot technologies.

Spot gold climbed 1.7 per cent to US$4,672.1 an ounce as at 5.30pm in Singapore, after hitting a peak of US$4,690.59 earlier. Silver soared 4.7 per cent to US$92.73, after it touched a high of US$94.1213. 

In Europe, Paris and Frankfurt opened more than 1 per cent lower, while London was also deep in the red. US stock futures also fell.

Mr Trump said that he would impose additional 10 per cent import levies from Feb 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, rising to 25 per cent on June 1 if no deal was reached.

Major European Union states condemned the tariff threats over Greenland as blackmail, and France proposed responding with a range of previously untested economic countermeasures.

The EU’s options include a package of its own tariffs on €93 billion (S$139 billion) of US imports that was suspended for six months in early August, and measures under an Anti-Coercion Instrument that could hit US services trade or investments.

Analysts at Deutsche Bank noted European countries owned US$8 trillion (S$10.3 trillion) of US bonds and equities, almost twice as much as the rest of the world combined, and might consider bringing some of that money back home.

“With the US net international investment position at record negative extremes, the mutual interdependence of European-US financial markets has never been higher,” said Deutsche’s global head of FX research George Saravelos. “It is a weaponisation of capital rather than trade flows that would by far be the most disruptive to markets.”

It should also make for a fraught few days at Davos as leaders from around the world gather in Switzerland at the World Economic Forum, including a large US group led by Mr Trump himself.

“The outcome of these new trade tensions is unclear, but what has long been evident is that there is no such thing as trade or tariff certainty any more,” analysts including ING Bank global head of macro Carsten Brzeski wrote in a note to clients. “What is clear is that a full-blown trade war between the EU and the US would leave only losers.”

“It is a clear signal that tariffs are being redefined as a geopolitical weapon rather than an economic negotiating tool,” said chief desk strategist Shoki Omori from Mizuho Securities in Tokyo. “The point is not the initial 10 per cent. The point is that nothing is ring-fenced any more.”

Some analysts though, see Mr Trump’s salvo purely as a negotiating tactic to gain leverage ahead of the World Economic Forum in Davos this week.

“My working assumption is that an ‘off ramp’ from these threats will soon be found, and that this turns into yet another ‘TACO moment’,” strategist Michael Brown at Pepperstone Group in London wrote in a note to clients.

TACO, short for Trump Always Chickens Out, is a term that gained prominence in 2025 after many threats and reversals during the global trade war he initiated with his “Liberation Day” tariffs.

Precious metals, meanwhile, have rallied sharply in 2026, following dramatic gains in 2025, as the US seized Venezuela’s leader and then doubled down on threats to take Greenland.

The Trump administration has also renewed attacks on the US Federal Reserve, intensifying worries over the central bank’s independence and fuelling the debasement trade, where investors avoid currencies and government bonds on concerns over debt levels. 

Investors will also be keeping close tabs on the US Supreme Court’s argument on Mr Trump’s effort to fire Fed governor Lisa Cook, which is due on Jan 21 and could be pivotal for the US central bank’s independence. REUTERS, BLOOMBERG