Gold, silver bets reset as trade wars reignite | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Gold and silver prices took off on January 20 as investors sought safe havens while the President’s geopolitical machinations over Greenland went full crazy.

Prices for both precious metals hit record highs, and early trading on January 21 suggests gold will reach even higher levels and likely drag silver to new highs as well.

The worry many traders have had since New Year’s —that prices for both metals are bubble-level high—is still valid. And warnings are growing louder for investors to be careful about sudden price drops.

You can measure the intensity of the price gains in gold’s relative strength index. It was at 76 on Tuesday night. Above 70 suggests overbought. If the RSI hits 80, a price break may hit soon.

Gold settled at a record $4,759.60 per troy ounce in New York on January 20, up $171.20 on the day. The price jumped to a record $4,891.10 in overnight futures trading before the New York open on January 21. Gold is up about 9.7% since December 31.

Silver, meanwhile, closed at $94.206 an ounce on January 20 and peaked at $94.99 on the day. It’s up about 31% since December 31.

Precious metals stocks have also moved higher. Freeport-McMoRan (FCX) gained 2.3%. Newmont Mining (NEM) added 4.2%. Hecla Mining (HL) jumped 6.2%. The SPDR Gold Shares exchange-traded fund (GLD) was up 3.8% on January 20.

Gold prices are surging after President Trump announced new 10% tariffs on European allies.

Gold’s big 25-year run

Gold has been on a fantastic roll since 2000, rising some 1,545% to $4,749, at last check. (But with one 43% slump between 2011 and 2015.)

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Many analysts see the metal breaching $5,000 before long. My own survey of Wall Street analysts generated a year-end average price of $5,180, with some projecting the price will top $6,000.

The sharp increase in metals prices coincided with steep drops in U.S. stock prices.

The Standard & Poor’s 500 Index fell 2.1% on January 20, the first day of trading after the Martin Luther King Jr. holiday. The Dow Jones industrials fell 871 points, or 1.8%, to 48,489, and the Nasdaq Composite Index slumped 561 points to 22,954.

Trump’s quest to own Greenland

The catalyst for all this market turmoil was — and is — the worry that President Trump’s demand that Europe sell Greenland to the United States would destabilize global financial markets and military security in Europe.

The president was headed to Davos, Switzerland, to speak on Jan. 21 about housing at the World Economic Forum. Trump often ad-libs during formal speeches. So, one can expect he will take up the topic of Greenland during his presentation.

He had already warned he would raise tariffs on imports to the United States from any European country that opposes the U.S. taking over Greenland. 10% to start and 25% if there were still problems later.

Asked at a news briefing ahead of his departure how far he might go to acquire Greenland, Trump said, “You’ll find out” at a White House news conference on Jan. 20.

Adding to the Administration’s aggressive stance toward Greenland, Treasury Secretary Scott Bessent belittled Denmark, which has controlled Greenland since 1814, as irrelevant. And he warned Europeans not to stand in the way of the U.S.

Danish Prime Minister Mette Frederiksen said she would not ‌yield ‌to Trump’s demands and abandon Greenland, Reuters noted.

Trump loves the idea of taking over Greenland nearly as much as he liked essentially taking control of Venezuela. Greenland, three times the size of Texas, is 80% covered by an ice sheet. Yet the island does have lots of natural resources, including rare-earth minerals, and a tiny population — just 57,000 — who don’t favor the U.S. ambitions.

The president told The New York Times recently that it wasn’t enough just to take over more of Greenland to expand its military presence or to allow more mining and development of its natural resources.

Trump’s comfort level at stake

That’s something the island, which the Danes have offered, and Greenlanders are comfortable with.

That’s not what makes the president comfortable.

Owning Greenland, Trump said, “is what I feel is psychologically needed for success. I think ownership gives you a thing that you can’t do, whether you’re talking about a lease or a treaty.”