Gold prices rose in European markets on Monday, resuming gains that had paused for two days, posting a fresh record high and moving sharply closer to trading above $4,700 per ounce for the first time ever, supported by the current pullback in the US dollar.

Investor demand for safe-haven assets strengthened amid rising tensions after US President Donald Trump threatened to impose additional tariffs on European countries over the dispute surrounding Greenland.

Price Overview

• Gold prices today: Gold prices jumped by about 2.05% to $4,690.80, the highest level on record, from the session opening level of $4,596.69. Prices recorded a low at $4,596.69.

• At Friday’s settlement, the precious metal fell by 0.4%, marking a second consecutive daily loss, due to correction and profit-taking.

• Gold prices rose by 1.95% last week, recording a second straight weekly gain amid escalating global geopolitical tensions.

The US dollar

The dollar index fell by 0.3% on Monday, moving away from a six-week high and reflecting broader weakness in the US currency against a basket of major and secondary currencies.

Beyond profit-taking, the US dollar has come under pressure due to investor unease following President Trump’s threats to impose additional tariffs on Europe.

As is well known, a weaker US dollar makes dollar-priced gold bullion more attractive to holders of other currencies.

Trump’s tariff threats

Over the weekend, Trump said he would impose an additional 10% tariff starting February 1 on imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain, until the United States is allowed to purchase Greenland.

Major European Union countries on Sunday condemned the tariff threats over Greenland, describing them as blackmail. France proposed responding with a set of unprecedented economic countermeasures.

EU diplomats said the bloc’s ambassadors reached a preliminary agreement on Sunday to intensify efforts aimed at dissuading Trump from imposing tariffs on European allies.

US interest rates

• According to the CME FedWatch tool from the CME Group, pricing for the probability of keeping US interest rates unchanged at the January 2026 meeting currently stands at 95%, while pricing for a 25-basis-point rate cut remains at 5%.

• Investors are currently pricing in two US interest rate cuts over the coming year, while Federal Reserve projections point to a single 25-basis-point cut.

• To reprice these expectations, investors are closely monitoring upcoming US economic data releases.

Outlook for gold

Matt Simpson, Senior Analyst at StoneX, said that geopolitical tensions have given gold investors an additional tailwind, pushing the yellow metal to fresh record levels.

Simpson added that with Trump adding tariffs to the equation, it has become clear that his threat over Greenland is real, and that markets may be one step closer to the erosion of NATO cohesion and deeper political imbalances within Europe.

SPDR fund

Gold holdings at the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by about 10.87 metric tons on Thursday, marking a second consecutive daily increase and the largest single-day inflow since December 22, lifting total holdings to 1,085.67 metric tons — the highest level since May 3, 2022.

The euro rose in European markets on Monday at the start of the week against a basket of global currencies, beginning to recover from a two-month low hit earlier in Asian trading against the US dollar. The move was supported by negative pressure on the US currency after President Donald Trump threatened to impose tariffs on Europe as part of efforts to take control of Greenland.

With inflationary pressures on policymakers at the European Central Bank easing, expectations for at least one European interest rate cut this year have strengthened. To reprice these expectations, markets are awaiting further economic data from the euro area.

Price Overview

• Euro exchange rate today: The euro rose by about 0.4% against the dollar to $1.1638, from Friday’s closing level of $1.1595, after touching a low of $1.1576 — the lowest since November 28.

• The euro ended Friday’s trading down 0.1% against the dollar, marking a second consecutive daily loss, following the release of strong US economic data.

• Last week, the euro lost 0.35% against the dollar, recording a third straight weekly loss, amid rising expectations for European interest rate cuts this year.

The US dollar

The dollar index fell by 0.3% on Monday, moving away from a six-week high and reflecting broad weakness in the US currency against a basket of major and secondary currencies.

Beyond profit-taking, the dollar has come under pressure due to investor concerns following threats by US President Donald Trump to impose additional tariffs on Europe.

Over the weekend, Trump said he would impose an additional 10% tariff on imports starting February 1 on goods coming from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Britain, until the United States is allowed to purchase Greenland.

Major European Union countries on Sunday condemned the tariff threats over Greenland, describing them as blackmail. France proposed responding with a set of economic countermeasures that have not previously been used.

European interest rates

• Recent data from Europe showed a slowdown in headline inflation in December, underscoring easing inflationary pressures on the European Central Bank.

• Following those data, money-market pricing for the probability of the ECB cutting European interest rates by about 25 basis points in February rose from 10% to 25%.

• Traders revised their expectations from the ECB keeping interest rates unchanged throughout the year to at least one 25-basis-point rate cut.

• To reprice these expectations, investors are awaiting further euro-area economic data on inflation, unemployment, and wages.

Views and analysis

Khoon Goh, Head of Asia Research at ANZ, said that tariff threats would normally be expected to weaken the euro. However, as seen last year as well, when “Liberation Day” tariffs were imposed, the impact in foreign exchange markets tended to skew more toward dollar weakness as uncertainty around US policy increased.

Goh added that while some may argue tariffs threaten Europe, the US dollar is bearing the greater burden, as markets are pricing in a higher political risk premium associated with the US currency.

The Japanese yen rose in Asian markets on Monday against a basket of major and secondary currencies, extending its gains for a second consecutive day against the US dollar and hitting a two-week high, supported by warnings and actions from Japanese authorities aimed at backing the struggling local currency.

The advance was also supported by reports that several officials at the Bank of Japan favor raising interest rates again, with some not ruling out a hike as early as April, as the yen’s depreciation threatens to exacerbate mounting inflationary pressures.

Price Overview

• Japanese yen exchange rate today: The dollar fell against the yen by 0.4% to ¥157.43, its lowest level since January 9, from Friday’s close at ¥158.06. The dollar recorded an intraday high at ¥157.95.

• The yen ended Friday’s trading up 0.35% against the dollar, marking its second gain in the past three days, as part of a recovery from an 18-month low at ¥159.45 per dollar.

• Beyond bargain buying, the yen also rose on hints of coordinated intervention between Japan and the United States to support the weakened currency.

Japanese authorities

Japan’s Finance Minister Satsuki Katayama said on Friday that the government “will not rule out any options” to deal with excessive and unjustified moves in the foreign exchange market, in a clear signal of the possibility of direct intervention to support the yen.

Katayama said the yen’s current weakness does not reflect Japan’s economic fundamentals and is hurting household purchasing power. She added that Japan remains in close contact with its international partners, especially the United States, to ensure that any action in currency markets is consistent with international understandings on exchange rate stability.

Speaking at her regular press conference, Katayama said the joint statement signed with the United States last September “was extremely important” and included provisions related to foreign exchange intervention.

Felix Ryan, an FX strategist at ANZ, said that nearing the intervention stage is often accompanied by statements from Japan’s Ministry of Finance or government officials regarding yen levels, or by inquiries made to counterparties.

Ryan added that the significance of such statements depends mainly on the dollar-yen level, as well as the speed of its movements over a 24-hour period.

Japanese interest rates

• Four sources familiar with the matter told Reuters that some monetary policy officials at the Bank of Japan see scope for raising interest rates sooner than markets currently expect.

• These sources point to a potential rate hike decision at the April meeting, given concerns that the continued decline of the yen could intensify inflationary pressures.

• The sources, who asked not to be identified because they are not authorized to speak to the media, said the Bank of Japan does not rule out early action if sufficient evidence emerges that the economy can achieve the 2% inflation target in a sustainable manner.

• Economists told Reuters that the Bank of Japan would most likely prefer to wait until July before raising the key interest rate again, with more than 75% expecting it to rise to 1% or more by September.

• Pricing for the probability of the Japanese central bank raising interest rates by a quarter percentage point at the January meeting remains steady below 10%.

• The Bank of Japan meets on Thursday and Friday this week to review economic developments and determine appropriate monetary tools for this sensitive phase facing the world’s fourth-largest economy.

At the start of the year, sentiment in the oil market was overwhelmingly and deeply bearish. Most forecasts pointed to a large supply glut. Then the United States struck Venezuela, arrested its interim president to stand trial on US soil, and warned Iran, Mexico, and Colombia that they could be next. Protests erupted in Iran, Saudi Arabia and the UAE took divergent positions in Yemen, and at the same time Brent crude had already moved above $65 a barrel.

Geopolitics has long been an unpredictable factor in the oil market. There is always the possibility of supply disruptions among some major producers due to chronic political instability. Libya is often the most cited example, but as seen this year, Middle Eastern oil producers are not immune to disruption risks, even if they remain theoretical for now. And if actual market data show no supply surplus, prices could jump to much higher levels.

This week, Vortexa reported that volumes of crude oil sitting on tankers for at least seven days — indicating storage rather than transit from seller to buyer — fell to 120.9 million barrels in the week ending January 9, according to data cited by Barchart. This figure differs sharply from another number frequently cited by some observers: total crude volumes on all tankers regardless of purpose, which stood at about 1.3 billion barrels at the end of last year. That number has been cited as the highest since the 2020 pandemic lockdowns, implying that demand is being destroyed now as it was then.

But there are different reasons behind so-called demand destruction, and not all of them are driven by natural market forces. Bloomberg reported this week, for example, that Russian oil exports fell by about 450,000 barrels per day in the four weeks ended January 11. This decline was not the result of a natural drop in demand due to accelerating electrification in India and China, but rather the consequence of US sanctions that came into force in late November, alongside threats of additional tariffs on Indian imports unless refiners stop buying Russian oil.

However, there is an important nuance to this story. Of the 450,000-barrel-per-day decline over the four weeks to January 11, only about 30,000 barrels per day occurred in the period between Christmas and January 4, according to Bloomberg. The agency added that total Russian oil exports over the four weeks to January 11, at 3.42 million barrels per day, were actually above the 2025 average. In other words, demand remains largely robust, especially for discounted oil.

Speaking of discounted oil, China appears to have lost access to a significant share of cheap Venezuelan crude, although this may prove temporary. This development puts China’s active stockpiling last year in a new light, suggesting it was able to wait and observe developments in the South American country, whose oil industry President Trump said would be managed by the United States indefinitely. Attention has now shifted to Iran and its protests, which have been welcomed by both the European Union and President Trump. Oil price forecasts have already begun to be revised.

Analysts at Citi said this week, according to Reuters: “Protests in Iran pose risks of tightening global oil balances through potential near-term supply losses, but primarily via higher geopolitical risk premia.” This came just two days after Goldman Sachs revised its oil price forecasts for this year lower again, citing excess supply. However, the bank noted that the protests had not yet spread to Iran’s main oil-producing regions, adding that “current risks are skewed toward political and logistical frictions rather than direct disruptions, keeping the impact on Iranian crude supply and export flows limited.”

Earlier in the week, analysts at ANZ wrote in a note that protesters had called on Iran’s oil workers to join the demonstrations. The bank said the situation “puts at least 1.9 million barrels per day of oil exports at risk of disruption.”

Ole Hansen, Head of Commodity Strategy at Saxo Bank, wrote earlier this week that oil traders have adopted strongly bearish positions, warning that “this leaves the market vulnerable to a bullish reversal if the technical or fundamental backdrop improves.” Hansen cited a Goldman Sachs survey showing that institutional investors have become less enthusiastic about oil as further evidence of the prevailing bearish mood, but noted that geopolitical events could push prices higher in the short term.

In another geopolitically supportive development for prices, two tankers were attacked by a drone in the Black Sea, according to a Reuters report citing unnamed sources. The vessels were en route to a loading point operated by the Caspian Pipeline Consortium, which was targeted by Ukrainian drone attacks last year. No comments were made regarding responsibility for the attack, as the Ukrainian government declined to comment and the pipeline operator also remained silent. Still, the mere occurrence of the attack once again highlights the geopolitical risks that until recently had been largely overlooked in favor of expectations of a supply glut.