Investors Rush to Gold and Silver as Greenland Ultimatum Shakes Europe

A bold geopolitical maneuver by the United States has sent shockwaves through the financial world, prompting a rush into safe-haven assets. The demand that Europe facilitate the sale of Greenland or face steep tariffs has destabilized equity markets and propelled gold and silver to unprecedented levels. Investors are reacting to what they perceive as a significant escalation in trade tensions.
Gold prices climbed 1.6% to reach $4,671 per ounce, while silver spiked over 3% to close at $93.15 after hitting an intraday record of $94.08. These gains came as the dollar weakened against a basket of currencies, further boosting the appeal of precious metals. The correlation between the falling dollar and rising commodity prices highlights the defensive stance many traders are now taking.
European equities bore the brunt of the sell-off. The French market led the decline with a nearly 2% drop, followed closely by losses in Germany and Italy. The prospect of a 10% tariff kicking in within weeks has forced analysts to downgrade their outlooks for European corporate earnings. If the tariffs escalate to 25% by June as threatened, the impact could be even more severe.
Market observers note that this situation feels different from previous trade disputes. The linkage of tariffs to the acquisition of sovereign territory is a novel and unpredictable variable. While some hope that diplomatic channels will resolve the issue before the deadline, the base case for many economists is now one of extended uncertainty and potential economic friction.
There is also speculation about how the European Union will respond. Because the EU operates as a single market, targeting specific member states presents logistical challenges and potential avenues for tariff evasion. However, the mere threat of disruption has been enough to sour sentiment, leaving gold and silver as the preferred beneficiaries of the current chaos.