Gold rose to a new record high above $4,800 in early Wednesday trading, supported by increased demand for safe haven and a weaker dollar as geopolitical tensions escalated after the United States and its NATO allies exchanged threats of action over President Donald Trump’s attempt to seize Greenland.
Spot gold rose 1.2 percent to $4,818.03 an ounce by 0125 GMT, after hitting a record high of $4,836.24 earlier in the session.
U.S. gold futures for February delivery rose 1 percent to $4,813.50 an ounce, according to Reuters data.
Trump said on Tuesday that he would not back down from his goal of controlling Greenland, and refused to rule out seizing the Arctic island by force.
He added, “I think we will work on something that will please NATO very much and please us very much, but we need it (Greenland) for security purposes,” noting that the alliance would not be very strong without the United States.
Meanwhile, French President Emmanuel Macron said Europe would not give in to bullies or succumb to intimidation, in a scathing rebuke of Trump's threat to impose hefty tariffs if Europe did not allow him to take control of Greenland.
The dollar fell to near three-week lows against the euro and Swiss franc on Wednesday after White House threats over Greenland triggered a broad sell-off of U.S. assets.
The Federal Reserve (the US central bank) is widely expected to leave interest rates unchanged at its meeting on January 27 and 28, despite Trump's calls to cut them.
Gold, which does not generate a return, typically rises in a low interest rate environment.
Silver rose 0.1 percent in spot trading to $94.68 an ounce, after hitting a record high of $95.87 on Tuesday.
Platinum rose 0.9 percent in spot trading to $2,485.50 an ounce after hitting a record high of $2,511.80 earlier in the day, while palladium climbed 0.4 percent to $1,873.18.
