Amid a sovereign crisis in Greenland, a dramatic collapse in long-term Japanese government bond prices, and threats to the Federal Reserve's monetary policy independence from Donald Trump, global safe-haven demand is receiving robust support. Gold, a key precious metal, is extending its record-breaking price surge. After a spectacular 70% rally in 2025, gold's bull market trajectory continues its powerful ascent in early 2026. U.S. President Donald Trump is set to deliver a major speech at the World Economic Forum in Davos, Switzerland, yet he shows no signs of backing down from his military ambitions regarding the Arctic island. This has prompted warnings from Greenland's Premier and Denmark, the island's sovereign nation, to its citizens about a potential military invasion, although the Premier added that such a severe crisis scenario remains unlikely.
Beyond the threat of a potential military seizure of Greenland, President Trump has directly threatened to impose further tariffs on eight European nations that oppose his administration's plan to take over the island. This has ignited intense fears of a destructive trade war between the United States and Europe. As of the latest update, spot gold breached the significant technical level of $4,880 per ounce, last trading at $4,862.51, up 2.03% on the day. The main COMEX gold futures contract was last at $4,862.10, a gain of 2.02%, after hitting an all-time intraday high of $4,890 on Wednesday.
This week, "sell America" trades have once again dominated financial headlines. Adrian Ash, Head of Research at BullionVault, told media that the spillover of market selling anxiety is now much broader. "With the Trump administration directly apprehending Venezuelan leaders, threatening military action in Greenland, threatening new tariffs on European allies, and menacing Fed independence, Trump's latest assault on the established world order is frightening all investors," he stated, adding that as global stock and bond markets decline, "gold and silver have hit new highs in all currencies."
Michael Armbruster, Co-founder and Managing Partner at Altavest, noted that while the news-driven stimulus from Greenland may fade quickly, the medium-term trend for precious metals still points upward. He believes the core driver of the current rally stems from demand: gold is primarily supported by central bank buying, while silver is being propelled by rapidly expanding industrial demand. According to media reports, Poland's central bank, one of the world's largest official buyers, will provide stronger funding support for this long-term gold bull run, having approved a significant plan to purchase an additional approximately 150 tonnes of gold.
As shown in the chart above, gold has continuously set new records in 2026—tensions over Greenland and the Trump administration's renewed attacks on Federal Reserve independence are underpinning the bull market. Copper, a core industrial metal, has also joined the metals rally, advancing toward $13,000 per tonne. The latest forecast from Wall Street giant Goldman Sachs indicates that, under the threat of tariffs from the Trump administration on metals like refined copper, funds will continue flowing into the U.S. copper futures market—a key factor behind the strong price gains for such industrial metals.
Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates, argues that the current global monetary order centered on the U.S. dollar is collapsing. Major global central banks no longer view fiat currency as a reliable store of wealth as they once did, turning instead to increase gold holdings. This reflects a shift from fiat currencies to hard assets, driven by soaring U.S. sovereign debt and the resurgence of global geopolitical distrust against a backdrop of trade and capital wars.
As the sovereign crisis over Greenland worsens and Japanese bonds collapse, gold continues its powerful rally in early 2026. The U.S. has now threatened tariffs on eight European countries—including Germany, France, and the UK—which oppose Trump's plan to take over Greenland, thereby intensifying fears of a potentially destructive trade war. French President Emmanuel Macron criticized Trump's tariff tactics, stating that Europe needs more sovereignty to avoid "American-style vassalization and bloody politics," while Canadian Prime Minister Mark Carney declared that the rules-based international order is effectively dead.
This latest war of words in Davos highlights how rapidly relations have deteriorated among long-standing traditional U.S. allies, undoubtedly unsettling global financial markets. This has triggered selling of dollar-denominated assets like the U.S. dollar, U.S. Treasuries, and U.S. stocks, while massively boosting robust demand for safe-haven assets like gold and silver.
The massive collapse in Japanese sovereign debt also underscores market concerns over the fiscal health of major developed economies, fueling the so-called "debasement trade," where investors shun currencies and government bonds. Sovereign debt concerns are escalating—debt-to-GDP ratios for the U.S., Germany, France, Italy, and the UK are projected to keep rising.
On Wednesday, spot gold and gold futures prices continued to hit record highs; silver futures, after reaching an all-time high on Tuesday, fluctuated around $95 on Wednesday. Platinum futures touched a record high of $2,511.10 before paring gains to trade largely flat. Daniel Ghali, Senior Commodity Strategist at TD Securities, wrote in a report that Japan's sovereign debt situation is sparking "fears of a market-led debasement trade in the rest of the developed economic world." "Gold's rally is about trust and confidence. So far, trust has been badly bent, but not broken. If it breaks, the momentum will be more lasting."
Gold may also receive stronger support from one of the world's largest public buyers, Poland's central bank. The bank approved a plan to purchase another 150 tonnes of gold; concurrently, under new rules introduced in December 2025, Bolivia's central bank has also resumed additional gold purchases for its foreign exchange reserves.
Gold prices are gathering momentum toward the super milestone of $5,000. "Gold remains our highest-conviction commodity view," said Daan Struyven, Co-Head of Commodity Research at Goldman Sachs, during a media briefing on Wednesday, citing persistent buying by global central banks. He reiterated that Goldman's base case is for gold to reach $4,900 per ounce, with significant further upside if diversification by private investment departments spreads more widely.
Investors are also closely watching a crucial Supreme Court hearing regarding Trump's attempt to fire Fed Governor Lisa Cook. Justices are scheduled to deliberate on Wednesday whether the U.S. President can dismiss Governor Cook, while legal battles over mortgage fraud allegations against the Fed official proceed.
As global geopolitical tensions may continue to worsen, coupled with the Trump administration's persistent threats to Fed independence and the collapse of "American economic exceptionalism" due to aggressive tariff policies against long-term allies—leading to a weaker dollar and selling of U.S. Treasuries—these factors collectively drive global central bank reserves and safe-haven flows toward the ancient precious metal, gold, for long-term value preservation.
James Steel, Chief Precious Metals Analyst at HSBC, emphasized in a recent research report that the fuel for this gold price surge is no longer just traditional monetary easing expectations, but a "potent cocktail" mixed with geopolitical risk and fiscal deterioration. Increasingly robust global safe-haven investment demand and strong central bank gold-buying步伐 continue to powerfully drive this "gold craze" forward. For investors seeking shelter in "hard safe-haven assets," this report is not just a price forecast but also a "vote of no confidence" in the current geopolitical landscape and the global fiat currency system.
Although chasing the rally by institutional and retail investors may lead to high volatility in the short term, continuous inflows from the global central banking system and long-term capital are building a higher floor for gold prices. Therefore, HSBC predicts that gold could break through the super barrier of $5,000 per ounce in the first half of 2026.
HSBC's report points out that besides traditional geopolitical risks (such as the Russia-Ukraine war and ongoing Middle East conflicts), the West's ballooning fiscal deficits are becoming a major hidden driver of rising gold prices. Forecast data suggests the U.S. federal deficit is expected to reach $2.05 trillion in fiscal year 2026, accounting for about 6.5% of GDP. Analysts at State Street and Deutsche Bank stress that since the freezing of Russian foreign reserves in 2022, emerging market central banks have accelerated "de-dollarization," meaning gold buying by "official reserve sectors," including those in emerging markets, is forming an "increasingly powerful source of sticky demand," highlighting a "lasting shift" in global reserve management—from U.S. Treasuries to gold.
Citibank's bullish outlook for precious metals is even more aggressive recently. Citi stated it expects silver prices to rise sharply to $100 per ounce in the near term and forecasts gold could break $5,000 within the next three months. Citi cited persistently worsening global geopolitics, uncertainty over the global economic outlook and currency values brought by the Trump administration, shortages of physical gold and silver, and threats to Fed independence as key supports for its forecast. In a bull scenario, Citi's analyst team raised their 0-3 month gold target from $4,200 to $5,000 per ounce and significantly increased their silver target from $62 to $100 per ounce.
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