Precious metals markets witnessed a historic surge on Wednesday, with gold prices jumping to a new record high, surpassing $4,800 an ounce for the first time ever. This meteoric rise comes amid growing uncertainty in global markets, fueled by escalating geopolitical tensions between the United States and its NATO allies over the future of Greenland.
In trading details, spot gold prices rose significantly by 2.1% to reach $4,862.46 per ounce by 4:46 GMT. US gold futures (February delivery) also saw a strong increase of 2%, reaching $4,861.20 per ounce. This surge in demand for the precious metal comes amidst a broad sell-off in US assets, from Treasury bonds to Wall Street stocks, which has pushed the dollar index to its lowest level in a month.
General context: Greenland and its strategic importance
Greenland, the world's largest island and a Danish territory, is of paramount importance due to its crucial strategic location in the Arctic region, as well as its vast untapped natural resources of rare minerals, oil, and gas. Historically, the island has been of strategic interest to the United States, which has maintained a military presence there since World War II through Thule Air Base, a vital component of the US early warning and missile defense system. This importance is further amplified by the melting of polar ice, which opens new shipping lanes and facilitates access to natural resources, making it an arena for international competition among major powers.
Impact of the crisis on global markets
Recent statements from the White House, in which US President Donald Trump described his goal of annexing Greenland as “irreversible” and hinted at the possibility of using force, have shocked European allies and sparked fears of a major diplomatic crisis. These threats have led to a mass exodus of investors to safe havens , primarily gold, a traditional hedge against political and economic risks. This instability is not only affecting gold prices but also threatening the stability of transatlantic relations and casting doubt on the future of security and economic cooperation between the United States and Europe.
As for other precious metals, prices showed mixed performance; silver settled at $94.48 per ounce, while platinum fell 0.5% to $2,449.98. In contrast, palladium saw a slight increase of 0.1%, reaching $1,866.46. Investors and analysts are closely monitoring developments in this crisis, as any further escalation could push gold prices to new record highs and deepen the turmoil in global financial markets.
