(Kitco News) - Gold and silver markets are strongly higher and hit new all-time highs overnight, on safe-haven demand amid keen risk aversion on the general marketplace. February gold was last up $136.00 at $4,731.00. March silver prices were up $6.728 at $95.29.
Markets on edge as tensions between U.S., Europe rise amid U.S. threats to take Greenland. Global stock markets early this week have slumped and gold hit a fresh record high as tensions between the U.S. and Europe flared over President Trump’s push to take control of Greenland. Trump's visit to the World Economic Forum in Davos this week is set to be dramatic after he shook the foundations of the EU and NATO alliance and pledged new tariffs related to his Greenland ambitions. Trump unleashed fresh social media threats against European allies and threatened tariffs on French wine. Trump took a swipe at French President Emmanuel Macron for rejecting an invitation to back his latest peace initiative and suggested the U.S. would impose duties on France’s agriculture sector.
Trump is heading to the World Economic Forum in Davos, including threatening eight European countries with tariffs for opposing his Greenland demands. “The European Union and the United States have agreed to a trade deal last July,” European Commission President Ursula von der Leyen said in a speech in Davos today. “In politics as in business, a deal is a deal. And when friends shake hands, it must mean something.” Trump announced a 10% tariff on goods from eight European countries beginning Feb. 1, rising to 25% in June, unless he has a deal for the purchase of Greenland.
“Trump’s threat to impose levies on countries opposing his bid to claim authority over Greenland risks reigniting the volatility that rattled markets in the early months of his second term. The sell off deepened after European officials signaled they were unlikely to back down and were considering retaliation,” reported Bloomberg. “The standoff is happening at a time when risk appetite had been supported by resilient earnings and sustained investment in artificial intelligence.
The markets outlook will hinge in part on the European Union’s response, with the bloc in talks to impose retaliatory tariffs on 93 billion Euros of U.S. goods,” said the report. Macron intended to request the activation of the EU’s so-called anti-coercion instrument, Bloomberg reported. German leader Friedrich Merz, however, said Monday that Germany’s heavier dependence on exports means it’s less willing to unleash the countermeasure. The tensions are also adding to the significance of a pending U.S. Supreme Court ruling on some of Trump’s earlier tariffs, with a decision possible as soon as today.
Shaky Japanese bond market pushing up global bond yields. U.S. Treasury yields rose to the highest in more than four months as a major sell off in Japanese bonds spilled over into global debt markets. Longer maturities led losses, with the U.S. 30-year yield rising nine basis points to 4.93% and 10-year yields up seven basis points to 4.287%, the highest levels since Sept. 3. Traders and investors are reacting to a tumble in Japanese bond prices, as well as the rising tensions between Europe and the U.S. “Concern around Japan’s fiscal outlook sent yields on the nation’s 40-year debt rocketing above 4% in the Asian session, the most on record. That’s weighing on long-dated debt around the world, with 30-year bonds also underperforming in Europe,” said a Bloomberg report.
Iran’s crackdown on protesters continues as the world watches. Top Iranian officials called for “leniency and compassion” for some of the protesters arrested during the latest wave of unrest, Bloomberg reported. Nearly 3,500 people have been killed in the Islamic Republic’s crackdown on the protests, according to rights groups, and almost 25,000 people have been arrested. Iran’s police chief Ahmad-Reza Radan said his forces will “pursue the rioters and terrorists to the very last person” and promised severe punishment for leaders and instigators of the protests. President Trump last week appeared to call off an attack on Iran over its use of deadly violence against protesters, saying he’d been assured that hundreds of planned executions and further killings had been called off.
IMF predicts slight uptick in global economic growth in 2026. The International Monetary Fund slightly raised its outlook for global economic growth this year, but it warned that concerns about an artificial intelligence bubble as well as trade and geopolitical tensions remain risks to the world economy. The Fund now expects global growth of 3.3% this year, up from the 3.1% it predicted in October, according to the World Economic Outlook report published Monday. The estimate for 2027 was unchanged at 3.2%. Some of the same factors that are seen keeping the world economy steady — an AI boom that’s fueling the stock market and a relative easing in trade tensions — could also become challenges if they reverse, the IMF said. In its report, the IMF highlighted the surge in spending on technology like AI, particularly in North America and Asia, as a growth driver. However, if the hoped-for productivity gains from the new technology don’t pan out, it could trigger an “abrupt” slump in markets that could spread to other sectors and erode household wealth, the Fund said.
China’s economy is losing steam. China’s economy lost more momentum last quarter even as it met the government’s target in 2025, in another year of lopsided growth that will be hard to sustain in an era of protectionism around the world, Bloomberg reports. While industrial production held up well in December, retail sales and investment worsened more than forecast. The world’s second-largest economy expanded 4.5% last quarter from a year earlier, the slowest pace since the reopening from Covid lockdowns in late 2022. For the full year, gross domestic product rose 5%, according to data released by the National Bureau of Statistics on Monday, confirming an estimate given by President Xi Jinping in a speech on New Year’s Eve and matching the expansion in 2024.
The key outside markets today see crude oil prices slightly up and trading around $60.00 a barrel. The U.S. dollar index is sharply down and the U.S. 10-year Treasury note yield is presently 4.287%--up significantly from last week.
Technically, February gold futures bulls’ next upside price objective is to produce a close above solid resistance at $4,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $4,500.00. First resistance is seen at the record high of $4,742.90 and then at $4,800.00. First support is seen at $4,650.00 and then at the overnight low of $4,622.20. Wyckoff's Market Rating: 9.5.
March silver futures bulls have the strong chart advantage and their next upside price objective is closing prices above solid technical resistance at $100.00. The next downside price objective for the bears is closing prices below solid support at $85.00. First resistance is seen at the overnight record high of $95.78 and then at $96.00. Next support is seen at $92.50 and then at the overnight low of $90.50 and then at $85.00. Wyckoff's Market Rating: 9.5.
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