To The Moon

Spot gold closed sharply higher on Tuesday (January 20), with the price unprecedentedly breaking above $4,700 per ounce, while silver also refreshed its historical high, surpassing $95 per ounce, indicating that rising geopolitical tensions are enhancing the appeal of safe-haven assets. Spot gold closed up $92.28, a gain of 1.98%, at $4,763.25 per ounce on Tuesday. FXStreet analyst Christian Borjon Valencia noted that on Tuesday, driven by intensified geopolitical tensions, including a trade war between the US and the EU, and a sudden spike in global bond yields, gold prices surged above $4,750 per ounce, setting a new record high near $4,766. Valencia stated that safe-haven sentiment propelled precious metals to historic highs, with silver prices also soaring to a new peak of $95.86 per ounce. The prevalent "sell US assets" trading strategy in the market is causing the US dollar and stocks to fall, as money markets appear to continue losing confidence in the United States. According to Bloomberg, a Danish pension fund announced that it will liquidate its holdings of US Treasury bonds by the end of this month due to "concerns that US President Trump's policies have created a credit risk that cannot be ignored." The latest developments over the weekend showed that US President Trump threatened to impose tariffs on eight European countries if they fail to reach an agreement on the annexation or purchase of Greenland. European countries have retaliated. According to the Financial Times, the EU is "prepared to levy €93 billion in tariffs in retaliation for Trump's threats over Greenland." Previously, French President Emmanuel Macron stated that "Europe will not yield to bullying, nor be intimidated," escalating his criticism of US President Trump. Fawad Razaqzada, market analyst at City Index and FOREX.com, said, "As investor demand for hedging political risks increases, gold prices continue to move into uncharted territory. A weaker US dollar provides additional strength to precious metals, thus reinforcing the gold rally amid wavering confidence in US assets." US President Trump posted an image on the social platform Truth Social early Tuesday morning while returning to Washington on his private jet from Florida, hinting at the annexation of Greenland, a Danish autonomous territory. Trump reiterated on Tuesday that the United States should possess Greenland. Trump said, "Just because a ship went there 500 years ago and then left doesn't give Denmark ownership of that land." Furthermore, Trump posted another image on Truth Social that day. In this picture, which appears to be an edited version of a news photo from last August, Trump is shown in the Oval Office facing a group of European leaders, the Ukrainian President, and the President of the European Commission, with a map beside them depicting Canada, Greenland, and Venezuela all painted with the Stars and Stripes pattern. Bloomberg reported on Tuesday that US President Trump criticized French leader Emmanuel Macron for rejecting his invitation to join a proposed "peace committee" and hinted that he might impose a 200% tariff on Champagne. On Monday local time, upon learning that Macron would decline his invitation, Trump told reporters, "Well, nobody wants him because he's going to be out of office soon." Trump added, "I'll put a 200% tariff on his wine and Champagne, and then he'll join." Macron's second term is scheduled to end next year, and he has repeatedly vowed not to leave office early. The Trump administration is requiring countries that wish to obtain a permanent seat in the proposed body to contribute at least $1 billion. According to a draft of the proposed organization's charter seen by Bloomberg, Trump would serve as the inaugural chairman and have the power to decide on membership. A person close to the French president previously indicated that Macron does not intend to accept the invitation. The person stated that Macron believes the charter's scope extends beyond Gaza and raises significant concerns, particularly regarding respect for UN principles and its institutional framework—which France considers non-negotiable red lines. According to the Financial Times, French President Emmanuel Macron has called on the EU to deploy its most powerful trade weapon against the United States after President Trump threatened to impose tariffs on several European countries over the Greenland dispute. A French presidential official said on Sunday that Macron will ask the EU to activate the so-called "anti-coercion instrument," which could restrict US companies' access to the EU single market. This tool, first adopted in 2023 and never used to date, allows the EU to take countermeasures against "economic coercion"—such as punitive tariffs—imposed by other countries. The US dollar fell sharply on Tuesday. US stocks tumbled to their lowest point in nearly three weeks on Tuesday, as investors were spooked by President Trump's renewed threat to impose tariffs on Europe over the control of Greenland. The US Dollar Index (DXY), which tracks the dollar against a basket of six major currencies, fell 0.83% to 98.57, marking its largest single-day drop since mid-December, reflecting increased investor concern over exposure to US markets. The accelerated decline of the dollar, resulting in its largest daily drop in over a month, made dollar-denominated gold cheaper for overseas buyers. Trump's renewed tariff threats against European allies prompted markets to replay the so-called "sell America" trade that emerged after the "Liberation Day" tariff announcement last April, with US stocks, bonds, and the dollar falling simultaneously. The S&P 500 and Nasdaq indices fell to one-month lows on Tuesday, as investors reacted negatively to the latest tariff threats following the long US holiday weekend. This wave of risk-off sentiment also pushed the Dow Jones Industrial Average to its lowest intraday level since January 5th. IG market analyst Tony Sycamore stated that investors are selling dollar assets primarily due to "concerns about prolonged uncertainty, strained ally relations, eroding confidence in US leadership, potential retaliation, and an accelerating trend of de-dollarization." He added, "Although markets still hope the US administration might ultimately de-escalate, as seen with past tariff statements, it's clear that acquiring Greenland remains a core national security objective for the current administration." Trump is scheduled to meet with global business leaders on Wednesday at the World Economic Forum (WEF) in Davos, Switzerland. Expectations for Federal Reserve interest rate cuts are also supporting gold prices, as lower rates reduce the opportunity cost of holding non-yielding assets like gold. Markets are currently pricing in two 25-basis-point rate cuts starting from mid-2026. The issue gained more attention after US Treasury Secretary Bassant stated that Trump could appoint a new Fed Chair as early as next week. Fawad Razaqzada, market analyst at City Index and FOREX.com, pointed out, "For gold, $4,800 and $4,900 per ounce are the next obvious reference points, with the key $5,000 level being a longer-term psychological target." Gold is considered a safe-haven asset during periods of economic and political instability. After surging 64% in 2025, it has accumulated a gain of over 10% so far this year. The US arrest of a Venezuelan leader and the doubling down on threats to annex Greenland have driven precious metal prices higher. The Trump administration's renewed attacks on the Federal Reserve have also intensified concerns about its independence and fueled currency devaluation trades, with investors selling currencies and government bonds due to worries about debt levels. Gold ETF holdings increased by 28 tonnes last week, marking the largest weekly increase since September. Market analysts remain bullish on gold's outlook, with Citigroup forecasting gold to reach $5,000 per ounce within three months, while silver prices are expected to touch $100 per ounce. FXStreet analyst Christian Borjon Valencia noted that during Tuesday's North American trading session, gold prices hit a historic high of $4,766 per ounce, with bulls targeting the $4,800 level. Although the price chart shows higher highs and higher lows, the Relative Strength Index (RSI) continues to indicate overbought conditions, having entered overbought territory but failing to break above recent highs. Valencia indicated that if gold breaks above $4,800 per ounce, the next resistance levels would be $4,900, followed by the significant $5,000 psychological barrier. Conversely, if the price falls below $4,700, the first support level would be $4,600, followed by the January 16th low of $4,536 per ounce.