Gold, silver soar to records as tariff threats rattle global stocks 

Gold and silver surged to all-time highs Monday while most stock markets retreated, as Donald Trump reignited trade war fears by threatening tariffs on several European nations over their refusal to support a US takeover of Greenland.

The US president has inflamed geopolitical tensions this month by declaring Washington would acquire the North Atlantic territory on national security grounds. After talks failed to settle what he called a “fundamental disagreement,” Trump on Saturday warned eight countries would be hit with new tariffs if they did not comply.

He said Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland will face a 10 percent tariff from February 1, rising to 25 percent from June 1, unless they accept US control of Greenland.

The announcement prompted swift backlash, with a joint statement from the targeted nations warning that “Tariff threats undermine transatlantic relations and risk a dangerous downward spiral.”

The move also casts doubt on a trade agreement reached last year between the United States and the European Union. German Foreign Minister Johann Wadephul told ARD television: “I don't believe that this agreement is possible in the current situation.”

Officials for French President Emmanuel Macron said he will urge the EU to invoke its unprecedented “anti-coercion instrument” to counter US pressure. The measure, designed to block foreign economic intimidation, would allow the EU to restrict goods and services entering its 27-nation market of 450 million people.

Bloomberg reported that member states are weighing retaliatory tariffs on EUR93 billion ($108 billion) of US products.

The renewed threat of a trade conflict between major global powers shook financial markets, extending gains in havens such as gold and silver following US actions against Iran last week and the ouster of Venezuelan president Nicolas Maduro.

Gold climbed to a record $4,690.59, while silver reached $94.12.

Most Asian markets traded lower, with declines in Tokyo, Hong Kong, Shanghai, Sydney, Singapore and Wellington. Seoul and Taipei recorded modest advances. European and US futures also fell, while the dollar weakened against the euro, pound and yen.

“The next signpost is whether this moves from rhetoric to policy, and that is why the concrete dates matter,” said Charu Chanana, chief investment strategist at Saxo Markets.

“On the European side, the decision path matters as much as the headline, because there is a difference between merely mentioning the anti-coercion instrument as a signal and formally pursuing it as action. Even if the immediate tariff threat gets negotiated down, the structural risk is that fragmentation keeps rising.”

Investors largely shrugged off China’s latest growth figures, which showed 5 percent expansion last year, matching targets despite a significant slowdown in the fourth quarter.

Meanwhile, traders in Seoul and Taipei appeared unconcerned by US Commerce Secretary Howard Lutnick’s warning that South Korean and Taiwanese chipmakers could face 100 percent tariffs if they fail to ramp up US-based production.

Key figures at around 0230 GMT

Tokyo - Nikkei 225: DOWN 1.0 percent at 53,412.88 (break)
Hong Kong - Hang Seng Index: DOWN 0.7 percent at 26,670.01
Shanghai - Composite: DOWN 0.1 percent at 4,099.23
Euro/dollar: UP at $1.1628 from $1.1604 on Friday
Pound/dollar: UP at $1.3397 from $1.3382
Dollar/yen: DOWN at 157.54 yen from 158.07 yen
Euro/pound: UP at 86.79 pence from 86.69 pence
West Texas Intermediate: UP 0.1 percent at $59.52 per barrel
Brent North Sea Crude: FLAT at $64.15 per barrel
New York - Dow: DOWN 0.2 percent at 49,359.33 (close)
London - FTSE 100: FLAT at 10,235.29 (close)