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Gold hits record as tariff fears grow

Gold prices climbed to a fresh high just below USD 4900 per ounce on Wednesday as escalating tensions between the US and Europe over Greenland and renewed trade frictions unsettled markets and boosted demand for safe-haven assets. The US dollar continued its slide, while precious and industrial metals advanced and bitcoin fell back below USD 90,000 amid the broader risk-off mood. US equities closed sharply lower on Tuesday and European stocks were under pressure, while Asian stock markets were mostly trading lower or little changed on Wednesday, with Japanese government bond markets under pressure due to fiscal concerns.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Gold
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Gold prices climbed to a fresh record near USD 4900 per ounce on Wednesday as escalating tensions between the US and Europe over Greenland and renewed trade frictions unsettled markets and boosted demand for safe-haven assets. Spot gold was trading about 2.2% high around USD 4870. The metal has gained more than 6% this week, helped not only by geopolitical worries but also by a weaker US dollar, which slid roughly 0.8% on Tuesday and continued to edge lower on Wednesday, making gold cheaper for holders of other currencies. Other precious and industrial metals also advanced, with silver hovering close to a recent record, trading just below USD 95. Meanwhile, bitcoin dropped below USD 90,000 for the first time since early January on Wednesday as a broad sell-off in global markets, heightened geopolitical tensions and fears over new US tariffs on European countries prompted investors to scale back risk exposure.

Asia stocks pressured by Greenland dispute

Most Asian equity markets declined on Wednesday as mounting geopolitical uncertainty over US President Donald Trump’s demands for control of Greenland and related tariff threats against European allies weighed on risk appetite, while concerns over weak public finances in Japan added to the cautious mood. The Nikkei 225 slipped 0.5% amid an accelerating sell-off in Japanese government bonds, with yields on ten-year paper climbing to their highest level in nearly three decades as investors questioned Prime Minister Sanae Takaichi’s plans for extra stimulus and a two-year suspension of the 8% sales tax on food. Other regional indices were also trading lower or with little change. Australia’s S&P/ASX 200 was down 0.4% and India’s Nifty 50 was 0.4% weaker, whereas Korea’s Kospi was trading 0.5% higher. Hong Kong’s Hang Seng Index was little changed, trading 0.1% higher, and mainland China’s CSI 300 was also nearly flat, edging up 0.1%.

US stocks slide on tariff fears

US equities fell sharply on Tuesday as the threat of new US tariffs on selected European countries in a dispute over Greenland raised fears of a fresh transatlantic trade war and pushed the main indices below key short- and medium-term trend lines. The Dow Jones Industrial dropped 1.8% to 48,488.59 points, the S&P 500 lost 2.1% to 6796.86 points and the technology-heavy Nasdaq 100 declined 2.1% to 24,987.57 points, while the VIX volatility index climbed above 20 to its highest level since November and investors rotated into precious metals such as gold. Cyclical and technology names were under particular pressure, with industrial group 3M slumping 7% after disappointing quarterly margins and AI chipmaker Nvidia losing 4.4% as part of broad declines among the so-called “Magnificent Seven” stocks.

German ZEW sentiment surges in January

Expectations for Germany’s economy improved markedly on Tuesday, with the ZEW Indicator of Economic Sentiment jumping to 59.6 points, 13.8 points higher than the previous month. The gauge of the current situation also strengthened, rising 8.3 points to minus 72.7 points, while sentiment toward the euro area climbed 7.1 points to 40.8 points and its situation measure improved to minus 18.1 points. Export-oriented sectors such as steel and metal, mechanical engineering, automotive, chemicals, pharmaceuticals and electrical engineering all reported sizeable sentiment gains despite recently announced additional US tariffs, helped by stronger-than-expected industrial production and orders in November and improved prospects from the Mercosur agreement. European stock indices also weakened on Tuesday, with trade tensions and political uncertainty weighing on sentiment. The Euro Stoxx 50 slipped 0.5%, while Germany’s DAX fell 1% to 24,703.12 points and France’s CAC 40 declined 0.6% to 8062.58 points.

Swiss producer and import prices decline in 2025

The Swiss Producer and Import Price Index slipped 0.2% in December compared with November, bringing the index to 104.3 points, and was 1.8% lower than in December of the previous year, according to data released on Tuesday. Average annual inflation for producer and import prices stood at -1% in 2025, after -1.7% in 2024 and +0.2% in 2023. The decline was driven mainly by lower prices for pharmaceutical products, petroleum products and electricity and gas, while food products became more expensive. Domestic producer prices fell by 0.4% on average in 2025, and import prices dropped by 2.2%. The Swiss Market Index lost 0.9% to end at 13,158.84 points on Tuesday.

UK unemployment steady as wage growth slows

The UK unemployment rate held at 5.1% in the three months to November, unchanged from the prior period and still the highest level since early 2021, according to data released on Tuesday. Underlying wage growth excluding bonuses eased to an annual 4.5% in the same three-month period, slightly below the 4.6% recorded previously. The Bank of England, which lowered its key interest rate by 25 basis points to 3.75% at its last decision in December after a series of cuts since August 2024, expects unemployment to remain close to 5% for the next two years.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Charles Schwab, Johnson & Johnson, Prologis, and TE Connectivity.

Economic data in focus: UK Consumer Price Index (08:00) and US President Donald Trump speaks at the WEF in Davos (14:30).

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