(Bloomberg) — Gold extended its record rally as the crisis over Greenland and a meltdown in Japanese government debt supported haven demand.
President Donald Trump, who is scheduled to address the World Economic Forum at Davos in Switzerland, showed no signs of backing down on his grab for the Arctic island. That prompted Greenland’s prime minister to warn the population of a possible military invasion, though he added it was an unlikely scenario.
Most Read from Bloomberg
The US threat against its NATO allies has rattled markets, adding renewed impetus to a record-breaking rally that lifted gold prices by more than 75% over the past 12 months. Investors have piled into the trade in recent weeks amid heightened geopolitical tensions and a renewed attacks on the Federal Reserve’s independence.
The US has now threatened tariffs on eight European nations — including Germany, France and the UK — which opposed Trump’s plan to take over Greenland, raising the specter of a damaging trade war. French President Emmanuel Macron attacked Trump’s trade tactics, saying the continent needed more sovereignty to avoid “vassalization and blood politics,” while Canadian Prime Minister Mark Carney said the rules-based international order was effectively dead.
The war of words in Davos underscored how quickly the relationship between traditional US allies has deteriorated, roiling financial markets, pushing down the dollar and boosting demand for havens like precious metals.
Meanwhile, a meltdown in Japanese sovereign debt spilt over into bond markets worldwide Tuesday, with long-dated Treasuries and the dollar both tumbling. As well as sparking fears of the repatriation of capital to the East Asian nation as yields rise, the ructions highlighted worries about the fiscal situations of major economies that fueled the so-called debasement trade where investors avoid currencies and government bonds.
The situation in Japan is spurring “fear of market-led debasement in the rest of the world,” Daniel Ghali, a senior commodity strategist at TD Securities, wrote in a note. “Gold’s rally is about trust. For now, trust has bent, but hasn’t broken. If it breaks, momentum will persist for longer.”
Gold is poised for more support from the world’s biggest reported buyer, the National Bank of Poland. The central bank approved plans to purchase another 150 tons, while Bolivia’s central bank has resumed purchases for its foreign reserves under new regulations enacted in December 2025.
“Gold remains our highest conviction,” Daan Struyven, co-head of commodities research at Goldman Sachs Group Inc., said at a media briefing on Wednesday, citing continued purchases by central banks. He reiterated Goldman’s base case scenario is for gold to climb to $4,900 an ounce, with risks to the upside, should private sector diversification broaden out.
Investors will also be watching a hearing before the Supreme Court relating to Trump’s attempt to fire Fed Governor Lisa Cook. Justices are set to consider whether the US president can oust Cook on Wednesday, while the legal fight over the allegations of mortgage fraud proceeds.
Spot gold rallied to a record $4,888.42 an ounce on Wednesday, while silver fluctuated near $95 after reaching an all-time high on Tuesday. Platinum hit a record of $2,511.10, before giving up its gains.
Copper joined the metals surge with gains toward $13,000 a ton, as Goldman Sachs forecast continued flows into the US — a key driver behind the industrial metal’s powerful price rally.
Spot gold was 2.1% higher at $4,865.09 an ounce at 9:47 a.m. in London, while platinum edged lower to $2,462.51 after advancing as much as 1.5% earlier. The Bloomberg Dollar Spot Index was steady after falling 0.5% over the previous two sessions.
Most Read from Bloomberg Businessweek
©2026 Bloomberg L.P.