Gold hits record above USD 5,100 as geopolitics drive safe‑haven rush

Gold prices marched to record levels above USD 5,100 on Monday, as investors sought a safe haven amid international political tension, and silver and platinum also scaled all-time highs.

Spot gold was up 2% at USD 5,077.22 an ounce by 1:31 p.m. ET (1831 GMT) after hitting a record USD 5,110.50. US gold futures for February delivery settled 2.1% higher at USD 5,082.50.

“Gold prices continue to be supported by elevated geopolitical and economic uncertainty. Central banks remain strong buyers as they diversify foreign exchange reserves and reduce reliance on the US dollar,” said Ryan McIntyre, president at Sprott Inc.

“In addition, investor inflows into physically backed exchange‑traded funds have resumed, with holdings up approximately 20% year over year,” McIntyre added.

TRUMP’S 100% TARIFF THREAT ON CANADA

In the latest geopolitical flare‑up, US President Donald Trump said on Saturday he would impose a 100% tariff on Canada if it follows through on a trade deal with China.

For precious metals this year, the major drivers are going to be “Trump and Trump,” said Adrian Ash, head of research at online marketplace BullionVault.

“A wave of new first-time investing is driving this move in precious metals. It’s led by private investors across Asia and Europe, rushing to build their personal holdings of gold and silver.”

The possibility that a coordinated currency intervention by US and Japanese authorities could be imminent was another focus of investor attention.

At the same time, this week’s Federal Reserve meeting, when the central bank is expected to hold rates steady, is overshadowed by a Trump administration criminal investigation of Fed chairman Jerome Powell.

Trump has placed pressure on Powell to lower interest rates.

That would support non-yielding gold, which has risen nearly 18% so far this year after gaining 64% in 2025.

Last year, gold breached major milestones, including USD 3,000/oz and USD 4,000/oz for the first time.

GOLD MAY REACH USD 6,000/OZ BY YEAR-END, SOME ANALYSTS SAY

Analysts see room for further upside momentum. Societe Generale anticipate gold will reach USD 6,000/oz by year‑end, though they caution this may be a conservative estimate with scope for further gains. Meanwhile, Morgan Stanley said the rally could continue, highlighting a bull‑case target of USD 5,700.

Spot silver scaled a new record high of USD 117.69 an ounce and was last up 10.2% at USD 113.46. Prices broke the USD 100 mark on Friday as retail investor and momentum-driven buying added to tightness in physical markets for the precious and industrial metal.

“Momentum is strong, with Chinese silver prices at a notable premium to London prices, indicating further gains in the short term are possible. However, such high prices should reduce industrial demand,” said UBS analyst Giovanni Staunovo.

Spot platinum rose by 1.8% to USD 2,816.38 an ounce after touching a record USD 2,918.80 while spot palladium climbed by 5.9% to USD 2,127.68, the highest levels since 2022.

(Reporting by Ashitha Shivaprasad and Anmol Choubey in Bengaluru, additional reporting by Swati Verma; Editing by Barbara Lewis, Bernadette Baum, and Shailesh Kuber)

US government debt rises after 2-year note auction; Fed chair pick in focus

NEW YORK – US Treasuries rose on Monday, pushing yields lower, after strong demand for an auction of two-year notes reflected a still healthy appetite for dollar-denominated assets despite persistent fiscal strains and rising global tensions over trade and national security.

Treasury yields were already lower before the auction, in line with European global bond markets, particularly France and Germany. They further extended their fall following the auction. Bond yields move inversely to prices.

The benchmark US 10-year Treasury note fell 2.8 basis points (bps) to 4.211% while the yield on two-year Treasuries dipped 1.3 bps to 3.592%.

The two-year note auction was priced at 3.580%, lower than the expected rate at the bid deadline, indicating investor demand robust enough to accept a figure lower than what the market had anticipated.

The bid-to-cover ratio, another gauge of investor appetite, was 2.75, higher than the average of 2.61.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 62.3 basis points.

Monday’s data, meanwhile, was positive. New orders for key US-manufactured capital goods beat expectations in November, suggesting business spending on equipment maintained a steady growth pace in the fourth quarter.

The market, however, showed little reaction to the report with the Federal Reserve’s Federal Open Market Committee widely expected to hold rates steady at its meeting this week in the 3.50% to 3.75% target range.

An auction of USD 70 billion in 5-year notes on Tuesday will also be closely watched.

“We don’t expect any big development coming from this week’s Fed meeting, with rates steady and no big shifts,” said Tom di Galoma, managing director at Mischler Financial Group in Park City, Utah.

CME’s FedWatch tool estimates more than a 97% chance of steady rates in the January meeting, with futures markets projecting a higher chance of another cut only in June.

POTENTIAL ANNOUNCEMENT ON FED CHAIR

Ian Lyngen, head of US rates strategy at BMO Capital Markets in New York, sees the potential announcement of President Donald Trump’s pick for the Federal Reserve chair as the event with the largest influence on Treasury markets this week.

BlackRock’s Rick Rieder seems to be the top contender for the job, as well as former Fed governor Kevin Warsh, according to Polymarket odds.

“Markets respect Rieder, he’s seen as a good candidate for the job,” Lyngen said, adding that investors would see Warsh or Rieder as good choices to keep the Federal Reserve independent. National Economic Council economist Kevin Hassett would be seen as a more political choice.

The call between Trump and Minnesota governor Tim Walz about immigration enforcement operations after a second fatal shooting by federal agents in Minneapolis also seemed to ease the risk of a potential partial US government shutdown ahead of a January 30 funding deadline.

Gold hit record above USD 5,100 on Monday as an array of geopolitical tensions pounded the dollar, while investors remained on tenterhooks about possible official buying of the yen after a series of surges in the Japanese currency.

(Reporting by Tatiana Bautzer; Editing by Alex Richardson and Gertrude Chavez-Dreyfuss)

Oil prices settle lower as traders assess impact of winter storm on production

HOUSTON – Oil prices settled slightly lower on Monday after climbing more than 2% in the previous session as investors assessed the impact on output in US crude-producing regions from winter storms and the impact of any tensions between the US and Iran.

Brent crude futures closed down 29 cents, or 0.4%, at USD 65.59 a barrel, while US West Texas Intermediate crude was down 44 cents, or 0.7%, at USD 60.63.

Both benchmarks notched weekly gains of 2.7% to close on Friday at their highest since January 14.

US oil producers lost up to 2 million barrels per day or roughly 15% of national production over the weekend, analysts and traders estimated, as a winter storm swept across the country, straining energy infrastructure and power grids.

Oil production outages peaked on Saturday, consultancy Energy Aspects estimated, with the Permian Basin likely to have experienced the largest share of that decline at around 1.5 million bpd. Production losses eased on Monday, with Permian shut-ins estimated at about 700,000 bpd and production set to be fully restored by January 30.

There were around two dozen reports of upsets at natural gas processing plants and compressor stations in Texas, according to regulatory filings over the weekend, but that paled in comparison to the more than 200 reported upsets during the first five days of a severe winter storm in 2021, TACenergy analysts said in a note on Monday.

Kazakhstan, meanwhile, was poised to resume production at its biggest oilfield, the energy ministry said on Monday, but industry sources said volumes were still low and a force majeure on CPC Blend exports was still in place.

The Caspian Pipeline Consortium, which operates Kazakhstan’s main exporting pipeline, said on Sunday that its Black Sea terminal had returned to full loading capacity after maintenance was completed at one of its three mooring points.

Traders were also wary of geopolitical risks, analysts said, as tensions between the US and Iran kept investors on edge.

US President Donald Trump said last week that the US has an “armada” heading toward Iran but hoped he would not have to use it, renewing warnings to Tehran against killing protesters or restarting its nuclear programme.

On Friday, a senior Iranian official said Iran would treat any attack “as an all-out war against us”.

“All in all, crude remains in a holding type trade pattern until more is known about how the Trump Administration will handle Iran,” said Dennis Kissler, senior vice president of trading at BOK Financial.

“Ukraine/Russian/US peace talks continuing, and OPEC stating they will likely stay the current course of production at their next meetings, remain the pressure points for prices,” Kissler added.

OPEC+ is expected to keep its pause on oil output increases for March at a meeting on Sunday, three OPEC+ delegates told Reuters.

US shale production could fall by as much as 400,000 barrels of oil per day in 2026 if OPEC countries try to increase market share and oil prices fall to as low as USD 40 a barrel, according to Rystad Energy CEO Jarand Rystad

(Reporting by Arathy Somasekhar in Houston, Stephanie Kelly, Florence Tan, and Sudarshan Varadhan; Editing by Sharon Singleton, David Goodman, and Nia Williams)

Gold rushes past USD 5,000 to record high on safe-haven rush

Gold surged to a record high above USD 5,000 an ounce on Monday, extending a historic rally as investors piled into the safe-haven asset amid rising geopolitical tensions.

Spot gold rose 0.85% to USD 5,024.95 per ounce by 2341 GMT, while US gold futures for February delivery gained 0.91% to USD 5,024.60 per ounce.

Gold soared 64% in 2025, underpinned by sustained safe-haven demand, US monetary policy easing, robust central bank purchases – with China extending its gold-buying spree for a fourteenth month in December – and record inflows into exchange-traded funds. Prices have gained more than 16% this year.

“We expect further upside. Our current forecast suggests that prices will peak at around USD 5,500 later this year,” said Philip Newman, director at Metals Focus.

“Periodic pullbacks are likely as investors take profits, but we expect each correction to be short‑lived and met with strong buying interest,” Newman added.

Escalating friction between the United States and NATO over Greenland has added fresh momentum to gold’s advance this year on expectations of more financial and geopolitical uncertainty.

On the geopolitical front, Ukraine and Russia ended a second day of US-brokered talks in Abu Dhabi on Saturday without a deal, with more discussions expected next weekend, even as overnight Russian airstrikes knocked out power for over a million Ukrainians amid subzero cold.

Adding to the uncertainty, US President Donald Trump said on Saturday he would impose a 100% tariff on Canada if it follows through on a trade deal with China, warning Canadian Prime Minister Mark Carney that a deal would endanger his country.

“Our forecast for the year is that gold will see a high of USD 6,400 an ounce with an average of USD 5,375,” independent analyst Ross Norman said.

Spot silver rose 1.72% to USD 104.72 per ounce. Spot platinum was steady at USD 2,767 per ounce, while spot palladium rose 0.17% to USD 2,013.50 per ounce.

Silver climbed above the USD 100 mark for the first time on Friday, building on its 147% rise last year as retail-investor flows and momentum-driven buying compounded a prolonged spell of tightness in physical markets for the metal.

(Reporting by Anjana Anil and Kavya Balaraman in Bengaluru; Additional reporting by Pablo Sinha; Himani Sarkar, and Subhranshu Sahu)

US yields dip as markets brace for Fed meeting; geopolitical headlines in focus

NEW YORK – US Treasury yields edged lower on Friday, moving in narrow trading ranges, as investors consolidated positions ahead of next week’s Federal Reserve policy meeting, while keeping an eye on geopolitical developments.

Friday’s economic data on US business activity and consumer sentiment was positive overall. Treasuries, however, showed little reaction to the reports, although they did support expectations that the Fed will pause its easing cycle next Wednesday.

In afternoon trading, the benchmark US 10-year yield slipped 1.6 basis points to 4.235%, while US 30-year bond yields dipped 1.8 bps to 4.831%.

On the front end of the curve, the US two-year yield, which reflects interest rate expectations, was down 1.6 bps at 3.607%.

‘WELCOME RESPITE’

Treasury yields spiked on Tuesday after Trump threatened to impose more tariffs on European goods. But the US commander-in-chief withdrew his threat after a framework on a deal to acquire Greenland was agreed with European leaders.

The details of the deal are still being discussed, however.

“Today’s action is a welcome respite after a very volatile 20-some odd days of headlines, geopolitical intrigue, Davos (the World Economic Forum in Switzerland), and earnings,” said George Catrambone, head of fixed income Americas at DWS Group in New York.

“But the net really is that all eyes are going to quickly move to the Fed next week.”

The US central bank’s policy-setting Federal Open Market Committee is widely expected to keep its benchmark overnight interest rate steady in the 3.50%-3.75% target range at the conclusion of a two-day meeting next Wednesday.

The US rate futures market has priced in about 44 bps of easing this year, or less than two cuts of 25 bps each, according to LSEG estimates. That was about 53 bps last week.

Friday’s data underpinned the market’s view of a shallow easing cycle, analysts said. Reports showed that US business activity was steady in January.

S&P Global said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, edged up to 52.8 this month from 52.7 in December. A reading above 50 indicates expansion in the private sector.

US consumer sentiment also improved in January, data showed, although concerns about high prices and the labor market lingered. The University of Michigan’s Surveys of Consumers said its Consumer Sentiment Index rose to a final reading of 56.4 this month, from an earlier estimate of 54.0. The index was at 52.9 in December.

However, the survey’s measure of consumer expectations for inflation over the next year slipped to 4.0%, the lowest reading since January 2025, from an earlier estimate of 4.2%. The inflation component slightly pushed Treasury yields lower, analysts said.

In other areas of the bond market, the Treasury yield curve flattened for a third straight session on Friday, as inflation concerns eased with the threat of tariffs on European goods off the table for now. The spread between two-year and 10-year yields narrowed to as much as 61.6 bps and was last at 63.6 bps, from 63.7 late on Thursday.

The curve had steepened to as much as 70.9 bps on Tuesday, the widest gap in roughly two weeks, reflecting market concerns about persistent inflation.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick Zieminski, Rod Nickel)

Fed, big earnings week loom for markets as global tensions muddy outlook

NEW YORK – Investors who have been consumed by geopolitical turmoil to start the year may switch focus in the coming week to prospects for artificial intelligence-related profits and the path for interest rates, with a huge crop of earnings reports and a Federal Reserve meeting on tap.

US stocks hit a rocky patch this week due to fallout from President Donald Trump’s aggressive stance to acquire Greenland, which threatened a new trade war with Europe.

Markets initially reeled, with stocks, bond prices, and the US dollar all swooning, an unusual occurrence. But major equity indexes rebounded later in the week after Trump backed off tariff threats, suggesting a deal was in sight for Greenland.

“It’s been a little bit of a short but steep roller-coaster ride over the past several days,” said Yung-Yu Ma, chief investment strategist at PNC Financial Services Group. “I don’t know that it’s completely behind us, but at least the acute phase seems to be behind us.”

INVESTORS SEEK INSIGHT ON AI BENEFITS TO PROFITS

The upcoming reporting week could turn attention to the outlook for US corporate profits, with earnings overall expected to rise substantially this year, including gains from a wider group of companies.

About one-fifth of the S&P 500 is due to report quarterly results, including Apple, Microsoft, Meta Platforms, and Tesla, four of the “Magnificent 7” megacap companies.

Coming off the third straight year of double-digit returns for the S&P 500, the benchmark index is up about 1% to start 2026. The index’s valuation is also above 22 times expected earnings for S&P 500 companies, well higher than its long-term average of 15.9, so “the earnings bar had better be met,” said Chris Galipeau, senior market strategist at Franklin Templeton.

“We can get sidetracked by the economic data, we can get sidetracked by geopolitics like Greenland, but at the end of the day, earnings are the driver,” Galipeau said.

With 59 companies having reported results as of Thursday, 81% have beaten analysts’ earnings estimates. S&P 500 earnings are now expected to have climbed 9.1% in the fourth quarter of last year from a year earlier, according to Tajinder Dhillon, head of earnings research at LSEG. In 2026, S&P 500 earnings are expected to climb more than 15%.

A critical theme this earnings season is whether companies are starting to reap benefits from AI-related investments. Doubts that massive spending on data centers and other infrastructure would yield returns weighed on tech and other AI-related stocks late in 2025, after that group had been a key driver for the bull market in US stocks that is entering its fourth year.

“It’s important just to hear from the major companies in the S&P 500 that they are continuing to push these uses and initiatives forward for AI so that people believe that it is not just a story of building and infrastructure,” said PNC’s Ma.

FED RATE OUTLOOK, INDEPENDENCE IN FOCUS

Investors widely expect the Fed to hold rates steady when it gives its monetary policy decision on Wednesday at the end of its two-day meeting. After the US central bank lowered rates by a quarter percentage point at each of its last three meetings of 2025, Fed Funds futures are pricing in at least one more such cut this year, according to LSEG data.

“We expect the Federal Open Market Committee to take an extended pause because the fed funds rate is close to neutral, downside risks to the labor market have begun to ease, and inflation has peaked,” Michael Pearce, chief US economist at Oxford Economics, said in a note.

The near-term rate outlook could take a back seat to issues around the Fed’s political independence. The meeting follows the revelation this month that Fed Chair Jerome Powell faced legal threats from the Trump administration, which Powell called a “pretext” to gain the dramatic rate cuts Trump wants.

Meanwhile, Trump is mulling his decision on a nominee to replace Powell, whose term as chair ends in May. A decision could come soon.

Investors will remain on guard for geopolitical wildcards or other policy proposals from the administration.

“If the Greenland situation, for example … were to go off the rails, and then we’ve got the tariff threat and all that sort of thing, that would certainly dent confidence and probably put the tape under pressure,” Galipeau said.

(Reporting by Lewis Krauskopf; Editing by David Gregorio)

Gold tops USD 4,900/oz; silver and platinum extend record‑setting rally

Gold pushed past USD 4,900 per ounce for the first time on Thursday, powered by ongoing geopolitical tensions, a softer US dollar, and expectations of Federal Reserve interest rate cuts, while silver and platinum prices hit fresh record highs.

Spot gold climbed to a record peak of USD 4,917.65 per ounce, as of 01:51 p.m. ET (18:51 GMT).

US gold futures for February delivery settled 1.6% higher to USD 4,913.4 per ounce.

The US dollar slipped 0.4%, making greenback-priced bullion more attractive to overseas buyers.

“Geopolitical tensions, generally weak dollar, expectations for the Fed easing this year are all factors that are part and parcel of the macro de-dollarisation trend and are still impacting the demand (for gold),” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

US President Donald Trump said he had secured total and permanent US access to Greenland in a deal with NATO, whose head said allies would have to step up their commitment to Arctic security to ward off threats from Russia and China.

But the details of any agreement were unclear, and Denmark insisted its sovereignty over the island was not up for discussion.

On the data front, the latest US Personal Consumption Expenditures (PCE) report showed consumer spending increasing in November and October, indicating a third straight quarter of strong growth.

Markets anticipate the US central bank will implement two quarter-percentage point rate cuts in the latter half of the year, raising non-yielding gold’s appeal.

“Short-term setbacks will be viewed as buying opportunities (for gold). We have been seeing the USD 5,000/oz level nearby and beyond that Fibonacci projection of USD 5,187.79/oz looks plausible,” Grant added.

Elsewhere, spot silver surged to a record high of USD 96.58/oz.

“Silver has a far more compelling fundamental narrative than gold.. Maybe it’s not a reserve asset in the way that gold is, but it still benefits from safe-haven flows and dollar weakness,” said Nikos Tzabouras, senior market analyst at Tradu.

Spot platinum rose 4.6% to a record high of USD 2,601.03. Palladium was up 3.3% to USD 1,900.59.

(Reporting by Sarah Qureshi and Anushree Mukherjee in Bengaluru; Editing by Joe Bavier and Shailesh Kuber)

Emerging market ETFs draw strong inflows on cheaper valuations amid market turmoil

Emerging market equity exchange-traded funds have attracted substantial inflows since the start of the year for their cheaper valuations and growth prospects, despite markets grappling with geopolitical tensions and a decline in global bond markets.

According to Refinitiv Lipper, emerging market equity ETFs have attracted about USD 14 billion in inflows so far this year, the highest among categories, and are set for a monthly record. The previous high of USD 10.9 billion was recorded in March 2021.

So far this year, US equity ETFs have recorded net outflows of USD 2.1 billion.

“Strong emerging market equity returns in 2025, which exceeded the US and international developed results, lifted interest, along with a weaker dollar and a search for growth outside of more expensive developed markets,” said Alan Kosan, head of strategy at Segal Marco Advisors.

“These factors are poised to attract investors new to the asset class as well as those rotating from other equity strategy exposures.”

The inflows have also been reinforced by a renewed “Sell America” trade, as investors trim exposure to richly valued US assets and rotate toward emerging markets with stronger growth visibility.

Underscoring the shift is the USD 3.7 billion outflow from US-focused equity ETFs this week, according to Lipper data, while emerging market equity ETFs attracted USD 2.7 billion.

James Fletcher, chief investment officer at Ethos Investment Management, pointed to tailwinds from South Korean and Taiwanese technology firms benefiting from artificial intelligence-related demand, rising commodity prices and a rotation into Chinese equities.

“We believe EM outperformance is more durable than just a short-term trade, because of structural growth in markets like Southeast Asia, India, and strong earnings growth estimates across EM broadly.”

This year, the MSCI Emerging Markets index has risen 5.4%, compared with 0.9% for the MSCI World index and 0.4% for the MSCI United States index.

The MSCI EM index’s forward 12-month price-to-earnings ratio stands at 13.5, well below the MSCI World’s 19.9 and the MSCI United States index’s 22.3.

(Reporting By Patturaja Murugaboopathy; with additional reporting by Gaurav Dogra in Bengaluru; Editing by Harikrishnan Nair)

Dollar edges lower as Greenland concerns ease; Aussie jumps after jobs data

The safe‑haven dollar slipped on Thursday, while risk‑sensitive currencies such as the euro and sterling firmed after President Donald Trump dropped tariff threats and ruled out seizing Greenland by force, helping calm jittery markets.

The greenback recovered versus the euro on Wednesday on Trump’s remarks about Greenland, after losing a bit less than 1% between Monday and Tuesday. It was last down 0.49% to USD 1.1744 per euro, following a 0.35% rebound in the prior session. The dollar weakened 0.69% to 0.7899 Swiss francs.

New Personal Consumption Expenditures inflation data – the Federal Reserve’s preferred inflation gauge – were unveiled, showing that US consumer spending increased solidly in October and November, likely keeping the economy on track for a third straight quarter of strong growth.

Consumer spending, which accounts for more than two-thirds of economic activity, rose 0.5% after rising by the same margin in October, the Commerce Department’s Bureau of Economic Analysis said on Thursday. Economists polled by Reuters had forecast consumer spending increasing 0.5% in November.

The Australian dollar rose to a 15-month high, buoyed by data showing an unexpected decline in the jobless rate.

The yen remained under pressure after Japanese Prime Minister Sanae Takaichi this week called a snap election and pledged measures to loosen fiscal policy.

Trump’s threat to levy tariffs on allied nations resisting his ambition to control Greenland had spooked markets, triggering a broad selloff of US assets. Still, some analysts said there was little evidence of a real move out of the US dollar.

“This whole argument about European investors selling US assets is very hard to sustain,” said Bob Savage, head market strategist at BNY.

“This isn’t a ‘sell America’ story, it’s a risk‑management story,” he added. “We’re just seeing more hedging because volatility has risen after being at very low levels at the end of last year.”

Details of a framework for an agreement on Greenland were not yet known. However, “the most likely outcome is still that the next wave of excitement will pass us by after a brief period of volatility and that the market will refocus on central banks and interest rate differentials,” Savage said.

AUSSIE SET FOR FOURTH STRAIGHT DAILY RISE

The Aussie was last up 1.15% to USD 0.684, touching its strongest level since October 2024, and headed for a fourth straight daily gain, outperforming even as risk assets came under pressure this week.

“The strength of both the Australian and the New Zealand dollar is the latest example that speculation about moves in short-term interest rates in relation to central bank policy remains alive and well,” said Jane Foley, senior forex strategist at Rabobank.

The Japanese currency weakened 0.07% at 158.42 per US dollar, near last week’s 18-month trough of 159.45.

Analysts anticipate a hawkish tilt from the Bank of Japan at Friday’s policy meeting to help stabilise the yen, which is trading uncomfortably close to the 159-160 levels that are seen as intervention territory.

Japan’s super-long-dated government bonds extended gains on Thursday on the expectation that the finance ministry could take some measures to contain further rises in yields.

(Reporting by Hannah Lang; additional reporting by Stefano Rebaudo; Editing by Christopher Cushing, Tom Hogue, Emelia Sithole-Matarise, Andrew Heavens, and Rod Nickel)

Dollar gains after Trump agrees to outline of Greenland deal, backs off tariffs

The dollar moved sharply higher against the euro and the Swiss franc on Wednesday as US President Trump withdrew a threat to impose tariffs on a number of nations, saying he had reached an agreement on a framework of a future deal on Greenland with NATO.

Trump’s threats to levy tariffs on a number of nations for their stance on Greenland spooked markets and triggered a broad selloff in US assets, but his comments in Davos on Wednesday that he had he ruled out military action in the northern island offered investors some relief.

The euro was down 0.36% at USD 1.17, having risen more than 1% in the last two sessions. It hit USD 1.168 on Tuesday, its highest level since Dec 30.

The safe-haven Swiss franc was down 0.77% to 0.7958 per dollar, after gaining about 1.5% between Monday and Tuesday.

Trump vowed on Saturday to implement a wave of increasing tariffs from Feb 1 on European Union members Denmark, Sweden, France, Germany, the Netherlands and Finland, along with Britain and Norway, until the US is allowed to buy Greenland, a step major EU states decried as blackmail.

Trump did not offer any details in a post to Truth Social on what the framework for a future deal with NATO would entail, but said as a result that he would not impose the tariffs.

The comments sparked a stock market rally, with the S&P 500 index up over 1.5%.

“We’re seeing a bit of a relief rally in markets,” said Matt Weller, global head of market research at StoneX.

“I really do think the details perhaps are not as relevant, even perhaps if they never come to light. The near-term crisis appears to be behind us, and we’ll wait to see what crops up next to drive sentiment.”

Still, European Union leaders are set to proceed with an emergency summit on Thursday to discuss options following Trump’s tariff threat, a council spokesperson said on Wednesday.

YEN ON THE ROPES, INTERVENTION TERRITORY IN FOCUS

The dollar was up against the Japanese currency, which faced its own selloff after Prime Minister Sanae Takaichi on Monday called snap elections for Feb 8 and pledged measures to loosen fiscal policy.

The yen was last down against the dollar at 158.430. Investors closely watched Japanese government bonds (JGBs) which were hit hard early this week, but rebounded on Wednesday.

“The absence of strategic buyers in this segment has made price action more sensitive and amplified volatility. I expect this environment of elevated volatility to persist through 2026,” said Vincent Chung, co-portfolio manager at T. Rowe Price.

“A further sell-off in JGBs would seem to drag the dollar/yen towards intervention territory at 159/160,” said Chris Turner, global head of markets at ING.

“However, if the yen sell-off is a self-inflicted wound from the Japanese government policy, the effectiveness of intervention will become increasingly questionable.”

(Reporting by Hannah Lang in New York; additional reporting by Stefano Rebaudo; editing by Toby Chopra, Jason Neely, and Nick Zieminski)

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