Gold and silver rates hit all-time highs: Here's why

In the wake of US President Donald Trump's threat to impose additional tariffs on European countries over the control of Greenland, gold and silver prices surged to new record highs on Monday, as investors are heading to safe-haven assets.

Spot gold rose by 1.6% to $4,666.11 as of 0551 GMT, after reaching an all-time high of $4,689.39. Similarly, US gold futures for February delivery also jacked up 1.7% to $4,671.90 per ounce.

Spot silver also marked a 3.6% uptick to settle at a record high of $94.08 per ounce. Christopher Wong, a strategist at OCBC, noted, "The medium-term narrative for silver remains constructive, supported by persistent physical deficits and resilient industrial demand, but caution may be warranted in the near term."

Trump's comments on Saturday suggested a series of additional tariffs on European allies until the United States is permitted to purchase Greenland. The development has intensified the ongoing dispute regarding Denmark's vast Arctic territory.

EU ambassadors are reportedly preparing countermeasures if the tariffs take effect, Reuters cited EU diplomats as saying.

"Geopolitical tensions have given gold bulls yet another reason to push the yellow metal to new highs," said Matt Simpson, a senior analyst at StoneX.

"With Trump throwing tariffs into the mix, it is clear that his threat to Greenland is serious, bringing us closer to potential political imbalances within Europe," he added.

Trump's latest tariff threats have resulted in the collapse of US stock futures and the dollar as well. This has increased demand for safe-haven assets like gold, the yen, and the Swiss franc.