The gold price reached new highs yet again, driven higher by safe-haven demand as US President Donald Trump escalates trade tensions with Europe, and the US dollar weakens.
The spot price of gold hit US$4,888.80 per ounce in early trading on Wednesday (January 21) ahead of the World Economic Forum in Davos where Trump is expected to face pushback against his bid for Greenland.
Gold price chart, January 14 to 21, 2026.
The yellow metal’s latest rise adds to an ongoing historic run.
After starting 2025 around US$2,640, gold had risen to the US$3,200 level by April. It stayed within a fairly flat range until the end of August, when it launched higher once again, breaking US$4,300 in mid-October.
The price of gold took a breather following that move, even falling briefly below US$4,000; however, its retracement was neither as steep nor as long as many market watchers expected it to be.
Gold began gaining steam again in mid-November, and took off again in earnest at the end of 2025.
In 2026, precious metals have continued to benefit from geopolitical tensions and economic uncertainty. Expectations of interest rate cuts after US Federal Reserve Chair Jerome Powell’s term ends later this year have provided support too. Trump’s feud with the Fed over rates took an eyebrow-raising turn on January 9, when the US Department of Justice served the Fed with grand jury subpoenas targeting Powell with a criminal indictment.
This latest upswing for the gold comes as investors moved out of global stocks following Trump’s threats over the weekend that the European nations opposing his bid to acquire Greenland will face 10 percent tariffs starting February 1. That figure could rise to 25 percent if a deal to secure Greenland for the US is not reached by June.
The nations targeted by the new tariffs include France, Germany, the UK, Denmark, Norway, Sweden, the Netherlands and Finland. The news has prompted fears of a full-blown US-Europe trade war, a weaker US dollar, higher inflation and a worsening outlook for the global economy. There are even concerns the conflict over Greenland could seriously weaken or dismantle the NATO alliance. Gold is traditionally used as a hedge against such risks.
Greenland’s key geographic position in the Arctic has long been coveted by the United States as a necessary strategic asset in its geopolitical struggle with Russia and China. “China and Russia want Greenland, and there is not a thing that Denmark can do about it,” Trump wrote on his social media platform Truth Social. “Only the United States of America, under PRESIDENT DONALD J. TRUMP, can play in this game, and very successfully, at that!”
‘As soon as the probability of escalation increases, defensive capital tends to move preemptively, rather than waiting for tangible impacts to materialize in economic data. In this context, gold functions as a portfolio risk-balancing asset.’
European leaders have responded with vows that they will not be blackmailed into allowing Trump to take Greenland, and are now preparing counter measures to the president’s tariffs.
Gold also continues to benefit from strong central bank buying, while silver’s industrial side is attracting attention. Although it is valued as an investment metal, silver is key for technology such as solar panels. Silver had reached a new record high overtaking the US$95 level briefly this week. However, the notoriously volatile metal is experiencing a slight pullback on Wednesday back into the US$93 range.
Elsewhere in the precious metals space, platinum rose to record highs on Wednesday, reaching US$2,543 per ounce. Palladium remains below its top price level, but is elevated above US$1,800 per ounce.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
