Gold is outperforming Silver and both have hit new record high prices on Greenland tariff and Iran war tensions.
- We are seeing a continuation of the incredible bullish run in Gold, and to a lesser extent Silver, rising firmly to make new record highs, with Gold trading near $4,900 and Silver near $96. Gold at $5,000 and Silver at $100 soon looks like a very realistic prospect. 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. President Trump will arrive in Davos today at the WEF forum where he will meet with many world leaders about Greenland and related tariffs, and probably issues concerning tensions with Iran as well.
- 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. However, EU and other leaders will be eager to calm matters and meet Trump over the next few days to try to find an amicable way forward without tariffs or conflict. Trump is again hinting at using military force over Greenland, a NATO ally, which is practically unthinkable. It is likely this is another example of Trump's usual negotiating tactic: raise impossible demands, so he still has a net gain to climb down to.
- Stock markets have mostly stabilized after the S&P 500 Index made a new 1-month low. Keep in mind that it is still a bull market, with the S&P 500 Index making a new record high just last week, but the bullish momentum is starting to look like it has gone, with the S&P 500 possibly starting to really top out. It would not surprise me if we won't see a new high here for several more months and possibly even longer than that.
- After months of very quiet and orderly markets (except precious metals), we are finally starting to see significant volatility return to the markets, especially in the Forex market, which has already made some significant moves this week. It may be that a trade war, or a major US/Iran war, or even both, will trigger volatile market swings. President Trump is still positioning US forces to strike Iran and moving more military assets into the region, as he reportedly instructs the Pentagon to prepare a "decisive" attack plan which could overthrow the regime there. Iran has threatened to hit back with "everything it has", which would likely include at least 2,000 ballistic missiles fired at Israel and other US allies in the region such as Saudi Arabia and the U.A.E.
- 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 Swiss Franc the weakest. The USD/JPY currency pair is now trading above the ¥158 handle. I have been long of this currency pair for a while, and trend traders will be too.