Gold and silver prices surged to record highs on Monday as global investors shifted toward safe-haven assets amid rising trade tensions between the United States and Europe. While precious metals rallied, major European equity markets faced notable declines as uncertainty weighed on sentiment.
Gold reached a historic peak of $4,689.39 (£3,499) per ounce, while silver climbed to $94.08 per ounce — its strongest level in years. Market participants continue to favor bullion as a hedge against geopolitical risks, inflation concerns, and potential economic slowdown.
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The latest rally was triggered by US President Donald Trump’s announcement of a 10% tariff on imports from eight European nations — Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland — effective from 1 February. He also indicated that the tariff rate could rise to 25% if negotiations over Greenland do not progress.
In response, the European Union is reportedly preparing a €93 billion (£80 billion) counter-tariff package targeting US goods, escalating fears of a prolonged trade conflict that could disrupt global supply chains and economic growth.
While bullion prices strengthened, European stock markets reacted negatively. London’s FTSE 100 index slipped nearly 0.4%, while the domestically oriented FTSE 250 fell around 0.9%. Mining companies such as Fresnillo and Endeavour benefited from higher metal prices, but most financial and industrial stocks traded lower.
Germany’s DAX index dropped 1.3%, with leading automakers BMW, Mercedes-Benz, and Volkswagen declining by roughly 2–3%. France’s CAC 40 fell 1.8%, pressured by luxury giants LVMH and Hermès.
Defence stocks, however, moved higher. Shares in Germany’s Rheinmetall and France’s Thales gained as geopolitical risks boosted demand for security and military-related firms.
US markets remained closed for a public holiday, but analysts expect renewed volatility once trading resumes.
Investors are closely watching an upcoming US Supreme Court ruling on whether President Trump exceeded his legal authority under the International Emergency Economic Powers Act when imposing certain tariffs. A decision against the administration could spark sharp market movements.
Meanwhile, the International Monetary Fund (IMF) has warned that escalating trade tensions remain one of the biggest threats to global economic stability. In its latest outlook, the IMF described the global economy as “steady” but cautioned that renewed trade conflicts could derail growth.
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