Gold jumped to a record high and stocks fell on Monday after Donald Trump’s pursuit of Greenland threatened to reignite a trade war with Europe and left transatlantic relations facing their gravest crisis in years.
Tensions over Greenland erupted over the weekend after the US president said he would hit eight European countries, including Germany, France and the UK, with tariffs from next month unless they support his ambitions to take over the Arctic island.
In response, EU capitals are weighing whether to target the US with €93bn worth of tariffs or restricting American companies from the bloc’s market.
Gold rose as much as 2.1 per cent to $4,690 per troy ounce and silver climbed 4.4 per cent as investors sought havens. European stock markets are set to open lower, with futures tracking the Stoxx Europe 600 down 1.2 per cent.
US futures tracking the S&P 500 and Nasdaq 100 declined 0.9 per cent and 1.2 per cent, respectively. US cash markets are closed on Monday for Martin Luther King Jr day.
“The imposition of tariffs marks an escalation in Trump’s rhetoric on Greenland and shows that he is serious in escalating matters to acquire [it],” said Jefferies’ Mohit Kumar.
Trump has in recent weeks used increasingly bellicose rhetoric towards Greenland, which the US president says is vital for American security and coveted by Russia and China.
Greenland is a semi-autonomous part of Denmark, which handles some policy areas itself but does not have responsibility for foreign and security policy.
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