Gold smashes $4,800 mark in global market amid rising US-Europe tensions

WEB DESK: Gold prices surged to unprecedented levels on Wednesday, crossing the $4,800-per-ounce threshold for the first time, as investors rushed toward safe-haven assets amid mounting geopolitical uncertainty and a weakening US dollar, Reuters reported.

Spot gold climbed 1.2 per cent to $4,821.26 an ounce in early Asian trading, after touching a record high of $4,843.67. U.S. gold futures for February delivery also advanced, rising 1 per cent to $4,813.50 per ounce.

The rally was driven largely by fears of renewed trade tensions between the United States and Europe following President Donald Trump’s renewed push to assert control over Greenland. Trump’s comments over the weekend, including threats of tariffs on European countries and refusal to rule out the use of force, unsettled global markets and raised concerns about the future of the NATO alliance.

Market analysts said the sharp rise in gold reflects eroding confidence in US policy direction. Kyle Rodda, senior market analyst at Capital.com, noted that investors are increasingly moving away from the dollar and US Treasuries, particularly long-term bonds, and shifting toward gold amid growing geopolitical risks.

Trump later sought to soften the tone, saying the US and NATO would “work something out,” but European leaders responded forcefully. French President Emmanuel Macron warned that Europe would not bow to intimidation, criticizing Trump’s tariff threats and stance on Greenland during remarks at the World Economic Forum in Davos.

The US dollar hovered near three-week lows against major currencies including the euro and Swiss franc, making dollar-priced commodities more attractive to overseas buyers. Asian equity markets extended losses for a third straight session, while the recent global sell-off in bonds showed signs of easing.

Meanwhile, expectations remain that the US Federal Reserve will keep interest rates unchanged at its January meeting, despite calls from Trump for rate cuts. Gold, which does not yield interest, typically benefits in low-rate environments.

In other precious metals, silver slipped 1 per cent to $93.59 an ounce after reaching a record high earlier this week. Platinum fell 0.7 per cent to $2,445.96, retreating from an all-time high of $2,511.80, while palladium eased 0.5 per cent to $1,857.19.