Gold prices soar as Trump doubles down on push for Greenland takeover

Gold prices surged to fresh highs on Tuesday morning, as US president Donald Trump doubled down on his stance for the proposed takeover of Greenland.

Gold futures (GC=F) jumped 2.9% to $4,726.20 per ounce at the time of writing, while spot gold was up 1.1% at $4,722.15.

The president reiterated his view while speaking to reporters on Monday evening regarding what he planned to say to leaders in Davos this week about Greenland. Trump said: “I don’t think they’re going to push ⁠back too much. Look, we have to have it.”

Trump said in a Truth Social post early on Tuesday morning that he had had a “very good” phone call with Mark Rutte, secretary general of the Nato, concerning Greenland.

However, he said: “As I expressed to everyone, very plainly, Greenland is imperative for National and World Security. There can be no going back — On that, everyone agrees!”

Read more: Markets sell as Trump lambasts UK Chagos deal and floats 200% champagne tariff

Over the weekend, Trump threatened to impose a new 10% tariff on Denmark and seven other European countries unless a deal is reached for the US takeover of the autonomous Danish territory.

He said in a social media post that this 10% levy would kick in on 1 February and would rise to 25% on 1 June, with these tariffs payable “until such time as a Deal is reached for the Complete and Total purchase of Greenland”.

This escalation in geopolitical tensions has fuelled demand for gold as a so-called safe haven asset, driving prices to new highs.

Wealth Club chief investment strategist Susannah Streeter said: “President Trump’s willingness to break old alliances and sow trade chaos, to further what he believes to be in the US interests, are causing anxiety among investors.”

“European leaders are prepared to meet to discuss retaliatory measures, as President Trump’s dialled up his determination to take control of the island,” she said. “With both sides so entrenched, negotiation for now looks highly difficult, and it’s likely to keep investor nerves on edge.”

Oil prices slipped on Tuesday morning, as Trump’s tariff threat over Greenland reignited trade war fears.

Brent crude (BZ=F) futures declined nearly 1% to $63.51 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) fell 0.8% to $58.87 a barrel.

Trump’s threat to implement new tariffs, and a potential retaliation from the Europe, has renewed concerns about the economic impact of a trade war.

The pound rose 0.4% against the dollar on Tuesday morning, to trade at $1.3475, as the greenback slumped amid the escalation in geopolitical tensions.

The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six currencies, was down 0.9% to 98.54 at the time of writing.

In addition to developments around Greenland, markets were also focused on economic data releases on Tuesday.

Data published by the Office for National Statistics (ONS) on Tuesday morning, showed that the rate of UK unemployment stood at 5.1% in September to November, which was unchanged from the previous three months, but remained at nearly a five-year high.

Meanwhile, wage growth continued to slow, as annual growth in average earnings, excluding bonuses, was 4.5% in September to November. That was down from 4.6% for the previous three months.

Saxo UK investor strategist Neil Wilson said that “sterling is catching a bid against the broadly weaker USD but it’s lower against the euro as unemployment and wage data this morning indicate it’s time for the Bank of England to cut rates faster.”

Read more: UK unemployment remains near five-year high and wage growth slows

The pound dipped 0.3% lower against the euro (GBPEUR=X) on Tuesday morning, trading at €1.1491 at the time of writing.

“Add the threat of tariffs and broader trade and economic uncertainty into the mix and it gives me more confidence the Bank of England will cut deeper than markets have been thinking – 3% on bank rate by year-end,” said Wilson.

More broadly, the FTSE 100 (^FTSE) slid 1.3% in early European trading, to 10,063 points. For more details on market movements check our live coverage here.

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