Gold and silver surge to new peaks as Trump’s tariff threats against eight European nations spark fears of a major US-EU trade war
HONG KONG: Gold and silver soared to record highs on Monday while most equity markets fell. The sell-off followed former US President Donald Trump’s threat to impose tariffs on eight European nations over their opposition to a US purchase of Greenland.
Trump announced he would hit Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland with 10% tariffs from February 1. These would rise to 25% from June 1 if they did not agree to the takeover of the Danish autonomous territory.
A joint statement from the targeted countries said the “tariff threats undermine transatlantic relations and risk a dangerous downward spiral.” German Foreign Minister Johann Wadephul told ARD television the move threatened a recent US-EU trade deal.
Aides to French President Emmanuel Macron said he would ask the EU to activate a never-before-used “anti-coercion instrument” against Washington. The measure allows for curbing imports into the EU’s 27-nation single market.
Bloomberg reported that EU member states were discussing retaliatory levies on €93 billion (USD 108 billion) of US goods. The prospect of a trade war shook markets, extending safe-haven gains driven by recent geopolitical tensions.
Gold, a key haven asset, hit a peak of USD 4,690.59. Silver struck USD 94.12.
On equity markets, Tokyo, Hong Kong, Sydney, Singapore, Manila, Mumbai and Wellington retreated. European and US futures also sank, though Shanghai, Seoul, Taipei and Bangkok posted gains.
“The next signpost is whether this moves from rhetoric to policy, and that is why the concrete dates matter,” wrote Charu Chanana, chief investment strategist at Saxo Markets. She warned of rising fragmentation and “more politicised trade.”
Investors largely ignored data showing China’s economy expanded 5% last year, in line with its target. Growth in the final quarter slowed sharply from the previous quarter, with exports providing the main basis for expansion.
“China enters 2026 with confidence still fragile, the property downturn unresolved, and the external environment turning more hostile,” wrote Sarah Tan, an economist at Moody’s Analytics.
Markets in Seoul and Taipei also brushed off a warning from US Commerce Secretary Howard Lutnick. He said South Korean chipmakers and Taiwan firms not investing in the United States could face 100% tariffs unless they boost US output.
