Gold rises above US$4,800 for the first time as crisis over Greenland worsens
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Gold hit a record high due to the Greenland crisis and Japanese debt issues boosting safe-haven demand.
PHOTO: AFP
- Gold hit a record high due to the Greenland crisis and Japanese debt issues boosting safe-haven demand.
- Trump's trade policies and threats against Europe sparked criticism and fears of a damaging trade war.
- Concerns over global fiscal stability and currency debasement are driving investors to gold and other safe havens.
AI generated
SINGAPORE – Gold rose to a record high – and silver was near an all-time peak – as the worsening crisis over Greenland and a meltdown in Japanese government debt
Spot gold surged past the US$4,800 per ounce level for the first time on Jan 21.
US President Donald Trump, who is in Switzerland for the World Economic Forum at Davos, showed no signs of backing down on his intention to take the Arctic island.
The US has threatened to put tariffs on eight European nations – including Germany, France and Britain – that have opposed his plan to take over Greenland, raising the spectre of a damaging trade war. French President Emmanuel Macron attacked Trump’s trade policy, saying Europe needed to develop more sovereignty to avoid “vassalisation and blood politics”, while Canadian Prime Minister Mark Carney said the rules-based international order was effectively dead.
The war of words in Davos underscored how quickly the relationship between traditional allies, the US and Europe, has deteriorated, rattling financial markets, pushing down the dollar and boosting demand for havens like precious metals.
A meltdown in the Japanese sovereign debt market also highlighted worries about the fiscal situations of major economies, a phenomenon that has fuelled the so-called debasement trade, where investors avoid currencies and government bonds.
The situation in Japan is spurring “fear of market-led debasement in the rest of the world”, Mr Daniel Ghali, a senior commodity strategist at TD Securities, said in a note. “Gold’s rally is about trust. For now, trust has bent, but hasn’t broken. If it breaks, momentum will persist for longer.” BLOOMBERG
