The crisis in Greenland is evolving from a geopolitical contest into a core shock to the global financial system. Markets are "selling America" in a rare "triple sell-off" of stocks, bonds, and currency, reflecting a deep crisis of confidence among investors regarding the weaponization of economic tools and the predictability of US policy. The surge in safe-haven gold, repeatedly hitting record highs, reveals the essence of this turmoil: capital is fleeing political risk in search of an ultimate safe haven unaffected by sovereign credit. This is not merely tactical hedging but could mark the beginning of a structural capital outflow. During the Asian session on Wednesday, spot gold fluctuated with an upward trend, currently trading around $4,830 per ounce, with an intraday gain of approximately 1.4%. As of 11:15, spot gold once hit a historic high of $4,849.57 per ounce.
The wave of "selling America" in the markets fully unfolded on Tuesday. Former President Trump's threat last Saturday to impose tariffs on eight European countries, directly linked to US ambitions regarding Greenland, has pushed geopolitics to the core of asset pricing. Investors rushed to reduce exposure to US risk assets, causing major indices to post their worst single-day performance since October and dragging the S&P 500 and Nasdaq into negative territory for the year.
The simultaneous selling of US stocks, government bonds, and the US dollar is what makes this event striking. Historically, risk-aversion events often support government bonds and the dollar. This time, however, both were sold off alongside stocks, indicating a loss of market confidence rather than a simple internal rotation into safe havens within the US market. On Wednesday, the US Dollar Index traded narrowly around 98.60, following two previous sessions of significant decline, with a drop of approximately 1%.
Ray Dalio's warning at Davos captured the deeper concerns driving capital flows. In his view, trade conflicts ultimately evolve into "capital wars," a point where investors and governments reconsider where to store their savings. When Denmark's AkademikerPension announced plans to sell approximately $1 billion in US Treasury bonds, this risk moved from theory to tangible action. While the fund cited deteriorating US fiscal conditions as the primary reason, it also explicitly acknowledged that intensified US-Europe tensions made the decision easier—a distinction that is crucial. This suggests that geopolitical trustworthiness acts as an amplifier, accelerating capital decisions that might otherwise have been gradual.
What is most unsettling for investors is not the tariffs themselves, but their use to achieve geopolitical objectives unrelated to trade fundamentals, effectively weaponizing them. Linking market access to territorial ambitions in Greenland has raised doubts about policy coherence and the durability of international agreements. This uncertainty is reflected across asset classes. Falling bond prices indicate weakening demand even for traditional safe-haven assets. The simultaneous weakness of the US dollar, despite heightened global risk aversion, further confirms that investors are not merely de-risking but are executing a broad-based retreat from US markets. The strong performance of gold completes this picture. During the Asian session on Wednesday, spot gold trended higher, persistently testing new record highs. This movement reflects not just market避险情绪, but a search for assets immune to political interference, currency devaluation, and institutional pressure.
US officials have projected a tone of confidence. Treasury Secretary Scott Bessent described Tuesday's turmoil as a sign of revitalized US leadership. The markets, however, delivered a starkly different verdict. Soaring volatility, shrinking liquidity, and shifting correlations among US assets are changes typically associated with a credibility crisis, not a cyclical correction. The gap between official statements and market behavior highlights escalating tensions. Investor focus has shifted beyond whether the US can "win" in negotiations to increasing concern about the methods employed to achieve victory, especially when those methods risk alienating allies and disrupting capital flows.
Some Wall Street analysts argue the sell-off could fade if tensions ease, citing precedents where past tariff threats were ultimately softened or reversed. This outcome remains possible. However, this event differs in two key aspects: the explicit geopolitical framework surrounding Greenland, and the apparent participation of long-term foreign capital in reducing US exposure. If tensions escalate further—whether through EU retaliation, legal challenges to tariff authority, or continued pressure on Federal Reserve independence—the "sell America" trade could evolve from a short-term shock into a structural theme. The market reaction is not solely about tariffs, but a broader reassessment of the reliability of the US as a financial anchor. The Greenland gamble has turned geopolitics into a direct input for capital allocation, reminding investors that even the most liquid markets are not immune to a loss of confidence when political risk converges with fiscal pressure.
As of 11:28 Beijing time, spot gold was quoted at $4,831.10 per ounce.
