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investingLive European market wrap: Risk retreats, metals surge on Trump Greenland tariffs
Key Takeaways (30s Read)
Trump's tariff threats on Greenland lead to a surge in metal prices.
Trump's threats of tariffs on Greenland are stirring geopolitical tensions, leading to a risk-off sentiment in markets. A 10% tariff is set to kick in on February 1, potentially increasing to 25% by June 1. This uncertainty is reflected in US equity futures, down 1%, while major European indices also hit losses of over 1%.
In currency markets, the dollar is weakening, with EUR/USD up 0.3% to 1.1626 and USD/CHF down 0.6% to 0.7983. The USD/JPY remains around 158.00 as geopolitical concerns grow. Japanese Prime Minister Takaichi has announced a snap election for February 8, adding domestic political factors into the equation.
In stark contrast, precious metals are rallying; gold is up 1.6% to $4,670, while silver has surged over 3% to break new highs above $93, reflecting a shift towards safe-haven assets in the face of growing economic uncertainty.
AI Analyst
AI Opinion
"Trump's tariff threats on Greenland have escalated geopolitical tensions, triggering a risk-off sentiment in the markets. This has led to a decline in equities while the dollar weakens, pushing investors towards safe-haven assets like precious metals, which are benefitting from the current uncertainty. As investors shift away from fiat currencies, we can expect further increases in metal prices. However, as the date for the tariff implementation approaches, volatility in the markets may rise. Additionally, the political situation in Japan adds another layer of complexity, necessitating close monitoring of its impact on currency markets."
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