9 min readThe World Economic Forum’s annual meeting in Davos wrapped up today after delivering one of the most volatile market weeks since the pandemic. President Trump’s aggressive push to acquire Greenland, combined with tariff threats against NATO allies, sent safe-haven assets surging while equities whipsawed. For traders watching the precious metals space, the message from the Swiss Alps was clear: geopolitical uncertainty isn’t going anywhere.
Gold (XAU/USD) hit fresh record highs above $4,900, while silver (XAG/USD) surged past $95 and approached the psychological $100 barrier. Meanwhile, the so-called “sell America” trade briefly erased over $1 trillion from the S&P 500 index before a dramatic reversal.
Here’s everything you need to know.
Trump’s Davos speech sparks market chaos
President Trump attended Davos in person on 21 January, leading the largest US delegation ever to the forum. His address combined triumphalist economic claims with geopolitical demands that sent markets into a tailspin.
The centrepiece was Greenland. Trump demanded “immediate negotiations” for US acquisition of the territory, initially threatening 10% tariffs on eight European NATO nations starting 1 February, escalating to 25% by June. The affected countries, Denmark, Germany, France, the UK, Sweden, the Netherlands, Norway, and Finland, watched markets plunge as investors fled risk assets.
On 20 January, the Dow fell 877 points (-1.8%), the S&P 500 dropped 2.1%, and the Nasdaq shed 2.4%. The worst session since October. Gold, naturally, surged.
The breakthrough came later on the 21st when Trump met NATO Secretary General Mark Rutte. In his speech, Trump declared he wouldn’t use military force to acquire Greenland, stating: “I won’t use force. That’s probably the biggest statement I made.” Hours later, he announced via Truth Social that the tariff threats were off the table, citing a “framework of a future deal” on Arctic security. Markets reversed sharply, with the Dow gaining nearly 700 points on 22 January.
Analysts dubbed this the “TACO trade”, Trump Always Chickens Out, a reference to his established pattern of extreme threats followed by negotiated retreats. It’s a pattern traders should keep in mind: tariff headlines may create short-term volatility, but follow-through has been inconsistent.
Gold hits record highs on safe-haven demand
The precious metals complex delivered extraordinary performance during Davos week, validating the “debasement trade” thesis as geopolitical uncertainty intensified.
XAU/USD set multiple new record highs throughout the week, reaching $4,891 on 20 January before pushing to a new all-time high above $4,950 on 22 January. The metal has now gained above 80% since Trump’s first inauguration in January 2025. Goldman Sachs raised its year-end target to $5,400, citing continued central bank buying, institutional hedging against policy unpredictability, and growing “structural distrust” in dollar-denominated assets.
The correlation between Trump’s rhetoric and gold pricing was immediate and tradeable. When he threatened tariffs, gold surged. When he backed down, it paused but maintained gains. As ING analysts noted: “Gold may be pausing, but the bull market is very much intact.”
Gold has delivered a truly explosive move to the upside, breaking above the $4,645 level just days ago. This area now stands as a potential key support zone on any pullback, with an unfilled gap and important Fibonacci retracement level creating a confluence zone worth watching.
Above current price, we have the $5,000 psychological resistance level. On the daily chart, price is deviating well above the 20 EMA, which sits comfortably above the 50 EMA, while also trading above the established ascending trend line. This structure is starting to resemble a parabolic move.
The RSI on the daily is now well into overbought territory. This doesn’t guarantee a pullback, but it warrants caution, especially if we see a break of structure on the lower timeframes. The trend remains firmly bullish, but traders should stay alert.
Silver approaches $100 amid supply squeeze
Silver arguably delivered the more extreme move, surging past $95 to reach $96, a new all-time high. The metal is now within striking distance of the psychological $100 barrier, representing an incredible 214% year-over-year gain, levels unseen in decades.
The rally reflects a genuine supply crisis. COMEX experienced withdrawals of 33.45 million ounces in just seven days during early January, roughly 26% of registered inventory, while lease rates spiked. The Silver Institute confirmed a fifth consecutive year of structural supply deficit, and China’s new export restrictions on refined silver (effective 1 January 2026) continue tightening global availability.
Silver benefits from dual demand drivers that gold lacks to the same degree: safe-haven buying plus substantial industrial consumption, particularly from the solar panel, electronics, and electric vehicle sectors. Nearly 60% of silver demand is industrial, compared to just 6-7% for gold. This combination has created a short squeeze dynamic that could persist if supply constraints continue.
On the four-hour chart, silver remains in a healthy uptrend with price action breaking cleanly above the important $95 resistance area, which marked the previous all-time high. This level is now acting as potential support on any retest.
Looking above, the $100 psychological resistance zone comes into focus, and this is also where a fib confluence zone begins with the 50% extension sitting right around this area. The moving averages confirm the bullish structure, with the 20 EMA sitting comfortably above the 50 EMA, both nicely fanned out and sloping to the upside, a sign of strong momentum.
On the RSI, we’re not yet in overbought territory, suggesting there could still be some fuel left in this rally before any meaningful pullback.
World leaders warn of ‘rupture’ in global order
Beyond the immediate market moves, the broader narrative from Davos was sobering. With a record 65+ heads of state in attendance, the consensus was clear: the rules-based international order is fracturing.
Canadian Prime Minister Mark Carney received a standing ovation for his keynote warning that “great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion.” His declaration that “American hegemony” was always “a pleasant fiction” marked a striking departure from traditional allied rhetoric.
European Commission President Ursula von der Leyen warned: “We now live in a world defined by raw power, whether economic or military, technological or geopolitical.” French President Macron was characteristically blunt, describing “a world without rules, where international law is trampled underfoot.”
For traders, this geopolitical fragmentation creates a structural tailwind for hard assets. When leaders openly discuss the breakdown of the post-war order, it’s not just rhetoric, it’s a signal that safe-haven demand isn’t going away anytime soon.
Crypto goes mainstream at Davos
The digital assets conversation matured dramatically this year, with dedicated WEF sessions on tokenisation and stablecoins featuring crypto executives alongside central bankers. The debate has shifted from “if” to “how.”
Trump committed to making America “the crypto capital of the world,” announcing that Congress was advancing market structure legislation. The administration has already signed the GENIUS Act, the first comprehensive federal stablecoin legislation, requiring 1:1 reserve backing with monthly audits.
Ripple CEO Brad Garlinghouse predicted crypto markets would reach new all-time highs in 2026, noting that institutional interest “is not priced into the market as much as I would have expected.” Bitcoin (BTC/USD) traded around $88,000-$90,000 during Davos, well below its October 2025 peak near $126,000, suggesting potential upside if regulatory clarity continues to improve.
What this means for traders
Davos 2026 crystallised a market reality that we should all internalise: the post-World War II institutional framework is fracturing, creating structural demand for assets outside the traditional financial system.
The combination of threatened Fed independence, geopolitical weaponisation of trade, and explicit great power competition supports a multi-year bull case for precious metals. Goldman’s $5,400 gold target and silver’s approach toward $100 aren’t wild speculation. They’re institutional conviction that geopolitical risk is now permanently higher.
For those trading CFDs on commodities, the takeaway here is to position for continued potential volatility. The “TACO trade” pattern means tariff headlines will keep generating short-term moves, but the underlying trend favours hard assets. Dips are likely to attract buyers.
The old order might not be coming back. And traders should plan accordingly.
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