Gold is outperforming Silver but both have hit new all-time high prices on Greenland tariff and Iran war tensions.
- One of the most dominant themes in the market today is Gold, and to a lesser extent Silver, rising firmly to make new all-time highs, with Gold trading above $4,700 and Silver above $94. Gold is outperforming Silver and is breaking to new highs as I write near the London Opening time. Trend traders will be interested to be long here. Analysts see these precious metals being driven higher by US President Trump aggressive rhetoric towards taking possession of Greenland, which is also causing tension with the EU via Denmark, as Greenland is an autonomous region of the Kingdom of Denmark. Also in the background is the prospect of a major war with Iran, with the US moving military assets towards the region and speculation over the fate of the Iranian regime following its unusually violent suppression of large-scale protests last week. There is a long-term bullish trend in Gold and Silver, and it is impossible to predict where it will end, although $5,000 for Gold and $100 for Silver will certainly be major milestones.
- President Trump has imposed new tariffs on 8 major NATO and EU allies over Greenland, starting at 10% and rising to 25% if the US has not acquired Greenland by 1st June 2026. The EU seems likely to impose retaliatory tariffs on selected imports from the USA, raising the spectre of a trade war. Another factor to look for the President Trump's Board of Peace, which was initially started as a mechanism to rehabilitate Gaza following the 2-year war between Israel and several other forces. Trump has been announcing membership and he seems to be trying to bring together countries with an interest in the region, however, it now seems that Trump views the Board of Peace, which he will apparently chair for life, as a de facto replacement for the UN Security Council - he also wants each member to pay $1 billion for a 3 year membership! It is doubtful that many countries will go along with this beyond Gaza, and it is another potential source of geopolitical tension which can roil markets.
- Stock markets are trading lower everywhere, for the same reasons that Gold and Silver are reaching new record highs, with the S&P 500 Index close to its 1-month low. Keep in mind that its still a bull market, with the S&P 500 Index making a new record high just last week, but the bullish momentum is looking weaker and weaker.
- The somewhat more risk-off market environment has sent Bitcoin tumbling again towards its January lows, after it had earlier made a bullish breakout beyond its medium-term range.
- The Forex market is showing more volatility this week, after a multi-month period in which it has shown extremely low volatility. The strongest major currency so far today has again been the New Zealand Dollar, with the Japanese Yen the weakest. The USD/JPY currency pair is again trading above the ¥158 handle. I have been long of this currency pair for a while, and trend traders will be too.