Since the start of the year, have experienced sharp movements. These jolts, triggered by US President Donald Trump’s dramatic policy actions, such as the incident involving Venezuela’s president on January 2, have elevated market uncertainty and driven traders to seek safety in precious metals.
Now, Trump has further extended fear by surging hype over Greenland since he started threatening countries, including the European Union, to pay extra tariffs if they do not support him in satiating his long-held wish to control Greenland’s rare earth materials.
Trump’s urge to secure rare earth materials, wherever he could obtain them, might be by any means, from any part of the world, including Ukrainian territory, to Greenland.
Undoubtedly, Trump’s increasingly aggressive stance on the Arctic territory seems to have elevated the rally to hit a record high on Tuesday, but it looks ready to evaporate since President Trump is due to address delegates at the gathering on Wednesday at the World Economic Forum in the Swiss ski resort of Davos.
But speaking on Tuesday morning, the US Treasury secretary told reporters there had been an overreaction to the president’s comments.
Undoubtedly, this is the same kind of hysteria we heard on April 2nd.
There was a panic. And what I am urging everyone here is sit back, take a deep breath, and let things play out,” Bessent said.
I feel that the worst thing countries can do is escalate against the United States. Back then, only one country, China, escalated as it could ended up in an unfortunate tit-for-tat.
Undoubtedly, the rally in gold futures has tested a record high at $4755.55 today, but could soon start shedding some gains, as the bulls could feel acrophobia at such a record high, as invading a country that doesn’t want to be invaded, and being part of a militaristic alliance, NATO, could never be a soft bite for Trump.
I feel that the US could also negotiate to have a peaceful agreement to get Greenland’s vast yet largely untapped supplies of rare earth minerals peacefully, or could take a step to calm the tensions, enhanced with Europe, as this step leads to imposing higher taxes on its own citizens.
Undoubtedly, the move has started a reversal from the tested peak today, could slide more steeply after breaking the significant support at $4,694, as the US President Donald Trump is likely to adopt an accommodative step to avoid surging tensions with Europe by delaying this issue for a later date.
Technically, signs of the rally slowing down are already showing advent of exhasion as on the hourly chart, gold prices are staying at the 9-period moving average ($4,733). If prices fall below this point, the next important level is the 20-period moving average ($4,714).
Dropping below that could trigger panic selling and push gold down to the 50-period moving average ($4,683) in today’s session, with selling possibly accelerating if this level breaks.
