The prices of gold and silver have surged to unprecedented record highs, as global financial markets react with alarm to former US President Donald Trump's renewed threat to impose sweeping tariffs on European allies in his pursuit of acquiring Greenland.
Markets in Turmoil as Investors Flee to Safety
European stock markets opened sharply lower on Monday, 19 January 2026, as investors sought refuge in traditional safe-haven assets amidst the escalating geopolitical tension. Gold rose by 1.6 per cent to reach $4,666 (£3,481.14) per ounce, having earlier peaked at an even higher $4,689 (£3,498.30). Silver followed a similar trajectory, climbing to a record high of $94.08 (£70.19) per ounce before settling slightly lower at $93.15 (£70.19).
The sell-off in equities was widespread across the continent. France's Cac 40 index fell by 1.6 per cent, Germany's Dax dropped 1.4 per cent, and Spain's Ibex was down nearly 1 per cent. Although US markets were closed for Martin Luther King Jr Day, American tech stocks listed in Europe also suffered significant losses. Shares in Nvidia and Microsoft both declined by 2.2 per cent, while Alphabet, Google's parent company, saw its shares fall 2.4 per cent.
The Source of the Storm: Trump's Tariff Ultimatum
The market volatility was triggered by statements from Donald Trump on Saturday. He threatened to impose 10 per cent tariffs on eight European countries—Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland—from 1 February, escalating to 25 per cent on 1 June. He explicitly linked this economic pressure to his longstanding ambition for the United States to purchase the Danish territory of Greenland.
"Greenland is very important for the national security, including of Denmark," Trump asserted last week. "And the problem is there’s not a thing that Denmark can do about it if Russia or China wants to occupy Greenland, but there’s everything we can do."
Political Fallout and Retaliation Plans
The targeted European nations issued a forceful joint statement, expressing their "full solidarity with the Kingdom of Denmark and the people of Greenland" and warning that acceding to Trump's demands would create a "dangerous downward spiral."
In the UK, Labour leader Sir Keir Starmer criticised the threats on Monday morning, labelling them as "completely wrong" and calling for calm. He added that he did not believe Trump's parallel threats of military action in Greenland were genuine.
According to reports from the Financial Times, the European Union is preparing retaliatory tariffs worth approximately €93 billion (around £80 billion) against the United States. The bloc is also reportedly considering measures to restrict US companies' access to the European single market.
The situation remains fluid, with financial markets poised for further turbulence as the deadlines for the proposed tariffs draw closer and diplomatic tensions continue to rise.
