Gold surges to a new record high, above $4,818

Today’s headlines

What’s happening: Gold prices surged to another record high this morning amid rising geopolitical tensions.

What happened: Prices for the yellow metal breached the $4,800 level as renewed tariff threats from US President Donald Trump boosted demand for safe-haven assets.

Weakness in the US dollar also lent support to gold prices this morning.

Why it matters: President Trump remained committed to acquire Greenland, with the island’s Prime Minister urging citizens to prepare for a potential military invasion. “It’s not likely there will be a military conflict, but it can’t be ruled out,” Greenland’s Prime Minister Jens-Frederik Nielsen said.

The latest concerns followed Trump’s warning of another 10% tariff on imports from various European nations, potentially increasing the rate to 25% in June, in case a deal is not reached on the island.

Weakness in the US dollar lent support to gold prices, as a softer greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell more than 0.1% to 98.51 this morning.

Gold, which generally sees higher demand amid economic and political instability, jumped around 64% last year and has gained another 10% year-to-date.

Rising speculations of interest rate cuts by the Federal Reserve have also provided a boost to the yellow metal, as lower rates decrease the opportunity cost of holding non-yielding gold. Investors widely expect the Fed to announce two rate cuts of 25 bps from mid-2026.

Trump is also expected to announce a new Fed chief as early as next week, according to US Treasury Secretary Scott Bessent, which supported prospects of future rate cuts.

Spot prices for gold jumped 1.2% to trade at $4,818.51 an ounce this morning, after surging around 2% in the previous session. US gold futures for February delivery jumped 3.7% to close at $4,765.80 per ounce on Tuesday.

In other metals trading, spot prices for silver fell around 1% to $93.6680 an ounce after topping the $95 mark in the previous session. Spot platinum fell 0.5% to $2,465.75, while palladium declined 0.6% to $1,868.37 this morning after recording sharp gains in the previous session.

What to watch: Investors will continue monitoring comments from Trump regarding tariffs on European nations and the acquisition of Greenland.

The delayed US PCE inflation data, scheduled this week, will also remain in focus, as it is expected to provide further insights into the Federal Reserve’s monetary policy outlook.

The markets today

The Canadian dollar in focus today ahead of some major economic reports

Context: The USD/CAD forex pair fell this morning amid continued weakness in the US dollar.

Details: The US dollar index extended its decline this morning, almost erasing its rebound so far in 2026, as markets remained concerned about President Donald Trump’s commitment to acquire Greenland.

President Trump warned to impose further tariffs on European nations, while the European Union indicated that it was looking to impose retaliatory tariffs on €93 billion worth of US products.

Weakness in the US dollar lent support to the loonie this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, declined more than 0.1% to 98.51.

Higher prices of crude oil, one of Canada’s major exports, provided a further boost to the CAD. Spot prices for WTI crude oil gained 0.5% to trade at $59.80 per barrel this morning.

The USD/CAD forex pair edged lower to 1.3832 this morning. The S&P/TSX Composite Index dipped 1.03% to close at 32,750.28 on Tuesday, retreating from a record close of 33,090 in the previous session.

What to watch: Investors await the release of economic data on Canada’s PPI (1730 UAE Time) and raw materials prices (1730 UAE Time) today. Canada’s industrial producer prices, which grew by 0.9% in November following a 1.7% rise in October, are expected to gain by 0.3% in December.

Analysts expect Canada’s raw materials price index to decline by 0.5% in December compared to 0.3% growth in November.

Other Markets: US trading indices closed lower on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 1.76%, 2.06% and 2.12%, respectively.

The news shaping the markets

A Russian attack damaged an energy infrastructure facility in the southern Odesa region of Ukraine and hit a major infrastructure facility in the Vinnytsia region. The news sent the USD/RUB pair lower in forex trading this morning.

Japan’s tourist arrivals came in at 3.6 million in December, sending total arrivals to a record 42.7 million in 2025, which exerted pressure on the USD/JPY forex pair.

Australia’s Westpac–Melbourne Institute Leading Economic Index rose 0.1% in December compared to a flat reading in November, sending the AUD/USD pair higher in forex trading this morning.

Argentina’s trade surplus widened to $1,892 million in December from $1,682 million in the year-ago period, exerting slight pressure on the USD/ARS forex pair.

India’s infrastructure output jumped by 3.7% year-over-year in December. This being a significant acceleration from the previous month’s 2.1% growth sent the USD/INR pair lower in forex trading this morning.

What else to watch today

South Africa’s inflation rate (1200 UAE Time) and retail sales (1500 UAE Time), France’s IEA oil market report (1300 UAE Time), Italy’s construction output (1300 UAE Time), UK’s CBI business optimism index (1500 UAE Time) and CBI industrial trends orders (1500 UAE Time), India’s M3 money supply (1530 UAE Time), Mexico’s retail sales (1600 UAE Time), US MBA mortgage applications (1600 UAE Time), Redbook index (1755 UAE Time), pending home sales (1900 UAE Time), and construction spending (1900 UAE Time), Russia’s current account (1700 UAE Time) as well as Argentina’s economic activity (2300 UAE Time).