Greenland triggers the risk of tariff war between the United States and Europe, Nasdaq futures fell more than 1%, gold and silver reached new highs, and copper prices approached 13,000

# Source: Wall Street Insights

By Zhao Ying & Ye Huiwen

Trump’s threats have stoked fears of a trade war, sending risk aversion rippling through global markets. Precious metals rallied, with spot gold breaking through the $4,690 per ounce mark on Monday to hit a new all-time high, surging as much as 2% intraday; spot silver also climbed above $94 per ounce, setting a record peak with an intraday gain of over 4%. U.S. stock futures edged lower, with S&P 500 index futures falling as much as 0.9% and Nasdaq 100 index futures dropping 1.1% at one point.

On Monday, January 19, triggered by Trump’s proposal to impose new tariffs on eight European countries, risk aversion heightened across global markets. Safe-haven assets like gold and U.S. Treasuries moved higher, while U.S. stock futures traded lower.

On the news front, according to CCTV News, U.S. President Trump posted a statement saying he would impose a 10% tariff on eight European countries that oppose his bid to purchase Greenland, with the tariff set to rise to 25% in a few months until an agreement is reached on the "complete and total acquisition of Greenland". This has sparked market concerns over a potential trade war.

Markets responded swiftly and sharply:

- Spot gold breached the $4,690 per ounce threshold on Monday, hitting a fresh record high with an intraday surge of over 2%.

- Spot silver also topped $94 per ounce, setting a new all-time high with an intraday gain of more than 4%.

- Copper prices followed the upward trend of gold and silver, edging higher on Monday. London Metal Exchange (LME) copper prices rose 1.3%, approaching $13,000 per tonne.

Meanwhile, risk assets came under pressure: S&P 500 index futures slid as much as 0.9%, and Nasdaq 100 index futures dipped 1.1% at one point.

U.S. 10-year and 30-year Treasury futures both declined by 0.02%.

In the foreign exchange market, the U.S. Dollar Index fell 0.2%, and the euro rebounded to 1.1633 against the dollar.

In Asian markets, South Korea’s stock market bucked the trend, with the KOSPI index breaking through the 4,900-point level for the first time, rising 1.3% intraday, driven mainly by the AI investment boom.

In the commodities space, Matt Simpson, senior analyst at StoneX, noted that geopolitical tensions have given gold bulls another reason to push prices to new highs, with Trump’s threats over Greenland viewed by the market as a material risk.

Silver outperformed even gold. Christopher Wong, strategist at OCBC, pointed out that silver’s medium-term narrative remains constructive, supported by persistent physical shortages, robust industrial demand and safe-haven demand. However, he also cautioned that the recent sharp drop in the gold-silver ratio may warrant tactical caution in the short term.

In addition, spot platinum rose 0.9% to $2,348.32 per ounce, while palladium climbed 0.5% to $1,808.46 per ounce.

Notably, despite trade war risks typically weighing on industrial metals, copper prices moved higher against the trend on Monday. According to Bloomberg analysis, the copper rally was mainly supported by a weaker U.S. dollar and Chinese economic data. Official data released by China on Monday showed that the country’s GDP grew by 5% last year, meeting the government’s target. Furthermore, demand fueled by the AI boom and expectations of supply shortages also underpinned copper prices. Wu Kunjin, head of base metals research at Minmetals Futures, said that as market sentiment toward metals improves, copper is tracking the upward movement of gold and silver.

For European and U.S. stock markets, Tim Waterer, chief market analyst at KCM Trade, opined that tariff threats targeting NATO allies have added new uncertainty to the international trade landscape, prompting traders to adopt a cautious stance.

David Forrester, senior strategist at Crédit Agricole in Singapore, pointed out that Trump’s threats have reignited the "sell America" trading bias. But he also mentioned that markets are eyeing the so-called "TACO trade (Trump Always Chickens Out)", which bets on Trump issuing threats first and then backing down.

In Asian markets, South Korea’s stock market diverged from the broader trend, driven largely by the AI investment frenzy. Nevertheless, South Korea’s semiconductor industry is facing a major overhang from U.S. tariff policies. Citing foreign media reports, the *Global Times* stated that U.S. Secretary of Commerce Howard Lutnick warned that semiconductor companies could face tariffs of up to 100% if they fail to invest in building factories in the U.S. This has clouded the outlook for South Korean enterprises’ investments in the U.S. Choo Kyung-ho, South Korea’s Deputy Prime Minister and Minister of Economy and Finance, told Reuters that the previously agreed $350 billion investment in the U.S. is "unlikely to kick off in the first half of this year". The sharp depreciation of the won and the lack of clear tariff rules have made the South Korean government and enterprises wary of large-scale capital outflows.

On the news front, Europe has responded quickly to Trump’s tariff threats. According to Reuters, EU ambassadors reached a broad agreement on Sunday to step up efforts to dissuade Trump from imposing the tariffs, while preparing retaliatory measures.

The countries targeted by Trump’s planned tariffs include Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland. Bloomberg quoted sources as saying that French President Emmanuel Macron may call for the activation of the EU’s anti-coercion instrument. Carsten Brzeski, global head of macro at ING Bank, warned in a report that a full-scale trade war between Europe and the U.S. would leave only losers, and the market no longer has "tariff certainty".

## Market Snapshots at Specific Times

12:59

South Korea’s KOSPI index broke through the 4,900-point mark for the first time, rising 1.3% intraday.

12:35

Risks of a U.S.-Europe trade war over Greenland sent Nasdaq futures down more than 1%, gold surged toward the $4,700 mark, and silver hit another record high.

12:34

Taiwan Capitalization Weighted Stock Index rose 1% to 31,737.20 points.

12:09

Japan’s 40-year government bond yield climbed 9.5 basis points to 3.895%, hitting a record high.

10:32

Japan’s Nikkei 225 index closed down 1% in morning trading at 53,412.88 points. Japan’s TOPIX index fell 0.5% in morning trade.

10:15

Indonesian rupiah fell to 16,905 against the U.S. dollar, the first time since early April 2025.

9:50

Japan’s 30-year government bond yield rose 10 basis points to 3.58%.

9:38

South Korea’s KOSPI index rose as much as 0.4% to hit a record high of 4,860.84 points.

9:38

Japan’s 20-year government bond yield climbed to 3.250%, a record high.

09:23

USD/CHF extended losses, falling 0.5% to 0.7982.

The euro rose 0.27% to $1.1630, rebounding from a seven-week low hit earlier in the session.

9:17

USD/JPY fell to 157.55, down 0.36% or 56 pips intraday.

9:03

Japan’s 10-year government bond yield rose 4 basis points to 2.22%.

9:00

Taiwan Capitalization Weighted Stock Index opened 0.2% lower at 31,336.77 points.

8:30

Japan’s Nikkei 225 index fell 1.3% to 53,248.91 points.

8:24

Japan’s 10-year government bond yield climbed to 2.215%, the highest level since February 1999.

7:07

Spot gold broke through the $4,650 per ounce mark to hit a new all-time high. Spot silver rose more than 2%, returning above $92 per ounce. The moves came after Trump issued tariff threats over the Greenland issue.

7:01

U.S. stock futures opened lower, with S&P 500 index futures down 0.8% and Nasdaq futures falling 1.1%.

U.S. 10-year Treasury futures rose 5 ticks, while 30-year Treasury futures also gained 5 ticks.

Spot gold rose over 0.9%, and spot silver climbed 1.4% to move back above $91.

(Source: Wall Street Insights App)

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