6 min readGold prices surged to a new all-time high near $4,700 per ounce on Monday as traders rushed into safe-haven assets. The rally comes as tensions between the United States and its European allies over Greenland continue to escalate.
What’s driving gold higher?
President Trump announced fresh tariffs on eight European countries this weekend, including Denmark, France, Germany, and the UK. The 10% levy starts February 1 and jumps to 25% in June unless Europe agrees to let the US take control of Greenland.
This marks a major escalation. European leaders responded with strong words, calling the tariff threats “unacceptable” and warning of a “dangerous downward spiral” in transatlantic relations.
For gold traders, this kind of uncertainty is fuel for higher prices. When governments clash and the rules of global trade get rewritten overnight, investors tend to move their money into assets that hold value regardless of which currency comes out on top.
Gold touched $4,690 per ounce during Asian trading on Monday, breaking the previous record set just days ago. The metal is now up roughly 6% since the start of January alone. To put that in perspective, gold has more than doubled from its levels just a few years ago. Major banks remain bullish. JP Morgan forecasts gold could hit $5,000 by year-end, while Goldman Sachs sees prices potentially running even higher if geopolitical risks continue to build.
Why Greenland matters
Greenland sits in a strategic location between the US and Europe, rich in rare earth minerals and oil reserves. The US already has a military base there, but Trump wants full control, citing threats from Russia and China in the Arctic.
Denmark and Greenland have flatly rejected any sale. Over the weekend, thousands of Greenlanders (nearly a quarter of the capital’s population) took to the streets to protest American pressure.
European NATO allies responded by sending troops to Greenland for military exercises. Trump called this “a very dangerous situation” and announced the tariffs in response.
What it means for traders
Gold tends to spike when geopolitical tensions rise, though these rallies can fade quickly if the situation calms down. What makes this different is the scale. We’re watching the world’s most powerful military alliance fracture in real time over territory.
The bigger picture
This isn’t just about Greenland. January 2026 has already delivered a military operation in Venezuela, rising tensions with Iran, and questions about Federal Reserve independence after news broke of a probe into Fed Chair Jerome Powell.
Gold has responded to each of these events. Central banks continue buying at elevated levels, ETF inflows are strong, and retail demand in markets like China and India remains robust.
The metal closed 2025 with gains of roughly 65%, its best year since 1979. Many analysts expected some consolidation in 2026. Instead, we’re seeing fresh momentum driven by a geopolitical environment that keeps getting more unpredictable.
What the technicals are telling us
Gold is showing incredibly strong trending behavior on the charts.
On Friday, we saw a retest of the previous all-time high around $4,550. Price wicked down to that level and immediately bounced, closing the daily candle with buyers stepping in right at that key zone. That kind of defense of a former resistance level turning into support is a textbook sign of strength.
Now in the first days of the new week, we’ve seen a big gap up to the upside, most likely driven by the increased tensions surrounding Greenland. Price is currently sitting above an unfilled gap at $4,620. Intraday traders will likely be watching this area closely for a potential reaction. If buyers step in at the gap, it sets up a potential continuation of this trend higher.
On the downside, a break below $4,550 would put us in a different situation. That could trigger a pullback in the trend, potentially down to the ascending trendline below that has been supporting this move.
The moving averages confirm the strength of this trend. The 20-day EMA and the 50-day EMA are nicely fanned out, with price trading well above both. When these averages spread apart like this rather than crossing or compressing, it signals strong momentum with no signs of exhaustion yet.
Key levels to watch:
- Unfilled gap: $4,620 (potential intraday support)
- Former ATH support: $4,550 (break below = trend pullback risk)
Trading involves risk.
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