Gold prices have soared past \$4,800 per ounce, reaching a new record high, as President Trump's renewed interest in acquiring Greenland sends ripples of uncertainty through global markets. The surge reflects a flight to safe-haven assets amid escalating geopolitical tensions and the potential for a trade war between the U.S. and Europe.
On Tuesday, gold prices rose by 1%, exceeding \$4,720 per ounce, fueled by the rush for safe-haven investments amidst escalating US-EU trade tensions. The price of gold reached \$4,860.76 USD/t.oz on January 21, 2026, which is a 2.04% increase from the previous day. Over the past month, gold's price has increased by 9.36%, and it is up 76.42% compared to the same time last year. Historically, gold reached an all-time high of \$4885.48 in January 2026.
Trump's recent actions, including threats to impose tariffs on eight European countries unless a deal is struck for the "complete and total purchase of Greenland," have unsettled investors. This has increased concerns about a potential trade war. These proposed tariffs, set to begin at 10% in February and potentially rising to 25% by June, have triggered unease and a search for safe-haven assets.
The stock market has reacted negatively to these developments. On Tuesday, the S&P 500 fell by 2.1%, equivalent to a \$750 billion loss, while the Dow Jones Industrial Average dropped 1.8%. The technology sector was particularly affected, with major companies like Nvidia and Apple experiencing significant declines. European and Asian markets also felt the impact.
Analysts point to several factors driving gold's rally, including geopolitical tensions, safe-haven demand, and central banks increasing their gold reserves while reducing reliance on the U.S. dollar. "It is really showing how economically uncertain the entire world is," said Justin Yampolsky, managing director of Muzeum. "Nobody knows what is going to happen. Everybody is kind of hedging their bets, and everybody just wants security however they can find it".
The situation has prompted emergency meetings among EU ambassadors, with potential retaliatory tariffs on approximately €93 billion of U.S. imports being considered. Some analysts believe that Trump's actions could lead to a global trade conflict.
Despite the current volatility, some analysts, such as those at J.P. Morgan, maintain a bullish outlook for gold, anticipating prices to reach \$5,000/oz by the end of 2026 and potentially \$6,000/oz in the longer term. This positive forecast is based on the expectation of continued strong demand from central banks and investors.
In the UAE, 24-carat gold climbed to approximately AED 573.75 per gram on January 20, up from about AED 562.85 the day before. Similarly, markets in India have also recorded significant gains, with gold prices reaching historic highs.
