Gold, silver hit record highs as trade war fears spark safe-haven rush

On Saturday, President Donald Trump reignited a trade war with Europe, threatening to impose 10% tariffs—rising to 25%—on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland in a bid to pressure U.S. allies into supporting his push to acquire Greenland.

Following Trump’s social media post, members of the European Parliament were quick to react, announcing they would freeze ratification of the trade deal that Mr. Trump and Ursula von der Leyen, president of the European Commission, struck last summer. Some members of the European Parliament are also calling for trade retaliation.

The renewed trade war is taking its toll on the U.S. dollar, helping to propel gold and silver higher. Spot gold last traded at $4,666.90 an ounce, up 1.5% on the day. At the same time, spot silver last traded at $93.49 an ounce, up nearly 4% on the day.

“Gold’s sharp response to tariff-related headlines highlights how market sentiment has shifted away from a narrow focus on growth or inflation, toward policy uncertainty as a primary driver. Tariffs do not only disrupt trade flows; they also pose spillover risks to supply chains, corporate margins, and medium-term growth expectations. As soon as the probability of escalation increases, defensive capital tends to move preemptively, rather than waiting for tangible impacts to materialize in economic data. In this context, gold functions as a portfolio risk-balancing asset,” said Linh Tran, Senior Market Analyst at XS.com.

U.S. markets are closed in recognition of Martin Luther King Jr. Day; however, analysts expect to see significant volatility this week as investors navigate turbulent economic conditions—an environment likely to further support the safe-haven allure of gold and silver.

Analysts have said that European nations could specifically target large U.S. tech firms in retaliatory trade measures. As this sector has been the driving force behind U.S. economic growth, such measures could have a significant impact on economic activity.

“I’d wager that this is all the ‘art of the deal’ playing out once more – toss out an outlandish threat, escalate the situation significantly, focus minds and extract concessions from the other party involved, before reaching some form of agreement in shorter order than would otherwise have been the case. I’ll leave others to question the merits of that approach, and potential longer-run geopolitical fallout from it, but for markets such a scenario likely means some near-term choppiness as headline noise becomes deafening, before a relief rally in due course when another ‘TACO’ moment arrives,” said Michael Brown, Senior Market Analyst at Pepperstone. “Unsurprisingly, while that headline noise does pan out, some participants may seek to take profits on their long risk positions, or seek downside protection through options, though all this should further bolster what was already an incredibly solid bull case for precious metals, like gold and silver, where the ‘path of least resistance’ continues to lead clearly higher.”

David Morrison, Senior Market Analyst at Trade Nation, noted that safe-haven demand is overshadowing growing headwinds in the precious metals space, as markets continue to expect the Federal Reserve will keep rates unchanged until at least June.

“Despite reduced expectations for multiple Fed rate cuts later in 2026, gold’s upward momentum remained intact, supported by a broader loss of confidence in other U.S. assets. The metal continues to attract defensive flows as investors are forced to update their risk outlook across global markets,” he said.

Silver continues to outperform gold as it benefits from its role as both a monetary metal and ongoing supply-chain issues.

“Prices remain elevated and there’s scant evidence that buyers are being put off, despite the daily MACD suggesting that silver is very overbought. The prevailing view amongst the bulls is that silver is in short supply, while demand from both investors and industry remains strong. And, as with gold, this morning’s drop in the U.S. dollar has also added to the general bullishness,” he said.