Safe-haven sentiment, driven by US President Trump's threat to impose tariffs on eight European nations opposing his takeover of Greenland, has pushed gold prices to a historic peak. As of the time of writing, spot gold rose 1.70% to $4,673.02 per ounce, having earlier hit a record high of $4,690.75 during the session. On January 17, local time, Trump announced on social media that a 10% tariff would be imposed on goods imported to the US from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1. He further declared the tariff rate would increase to 25% from June 1, and remain in effect until the involved parties reach an agreement on the US "comprehensively and thoroughly purchasing Greenland." Notably, on January 16, during a White House rural healthcare event unrelated to Greenland, Trump referenced his past tactic of threatening pharmaceutical tariffs to pressure European countries. Trump stated, "For the Greenland issue, I might do the same. If a country doesn't cooperate with us on acquiring Greenland, I might impose tariffs on them, because Greenland is crucial for US national security. So I might indeed do that." On January 18, local time, multiple EU nations are considering retaliatory measures, such as imposing tariffs on €93 billion worth of US goods imported into the EU or restricting US companies' access to the EU market. This is in response to Trump's planned tariffs on the eight European countries aimed at securing Greenland. An EU diplomat revealed that if an agreement with the US is not reached, the retaliatory tariffs would automatically take effect from February 6. Furthermore, several Members of the European Parliament stated on January 17 that, in light of US threats regarding Greenland, the trade agreement reached between the EU and US last July would not be approved. They also called for using anti-coercion tools to respond to the US tariff hikes. Under the previously agreed EU-US trade deal, the EU was to eliminate tariffs on US industrial goods and provide favorable market access for US seafood and agricultural products, in exchange for the US imposing a 15% tariff on most EU goods exported to America. It was confirmed by European sources on January 17 that the European Parliament will not advance the approval process for this agreement. This development injects significant uncertainty into the prospect of a US-EU trade war, thereby strengthening the safe-haven demand for precious metals.
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