Gold prices surged to an unprecedented level on Tuesday, breaking past the $4,700-per-ounce mark for the first time, as escalating geopolitical tensions and renewed tariff threats from US President Donald Trump triggered a flight to safe-haven assets. Silver, meanwhile, hovered near record highs despite modest profit-taking.
Spot gold climbed 0.7% to trade at $4,699.93 an ounce by 0514 GMT, after touching an all-time high of $4,701.23 earlier in the session. US gold futures for February delivery jumped even more sharply, rising 2.4% to $4,706.50 per ounce, reflecting heightened investor demand for protection against market uncertainty.
Silver prices eased slightly after a strong rally. Spot silver slipped 0.4% to $94.27 an ounce, retreating from an earlier record high of $94.72. Despite the dip, silver remains near historic levels, supported by the same risk-off sentiment driving gold.
Market sentiment turned cautious after President Trump renewed threats to impose additional tariffs on European allies. Tensions intensified further as Trump pushed for US sovereignty over Greenland, a move that has unsettled diplomatic relations with Denmark and prompted the European Union to consider retaliatory measures. The developments have weighed on equities while boosting demand for precious metals.
Analysts say Trump’s policy stance has played a major role in the rally. Tim Waterer, chief market analyst at KCM Trade, described the president’s approach as disruptive, noting that his aggressive trade policies and preference for lower interest rates have been highly supportive of gold and silver prices. According to Waterer, Trump’s second term has so far proven to be a strong tailwind for precious metals, with political uncertainty fuelling sustained inflows.
Gold has now gained more than 70% since Trump began his second term a year ago, underlining its role as a hedge against political risk, inflation concerns, and currency volatility.
Additional support for gold came from lingering worries about the independence of the US Federal Reserve. This week, the US Supreme Court is expected to hear a case related to Trump’s attempt to remove Federal Reserve Governor Lisa Cook, raising fresh concerns about political pressure on monetary policy.
While the Federal Reserve is widely expected to keep interest rates unchanged at its January 27–28 meeting, Trump has continued to publicly call for rate cuts. Gold, which offers no yield, typically performs well in a low-interest-rate environment.
Kelvin Wong, senior market analyst at OANDA, said the Fed is still likely to continue its rate-cut cycle into 2026, citing a slowing labour market and weak consumer sentiment. He noted that markets are now pricing the next potential rate cut for mid-2026, possibly in June or July.
Among other precious metals, spot platinum fell 0.8% to $2,355.60 an ounce, while palladium declined 0.7% to $1,828.58.
