Gold prices reached new record highs this week amidst rising geopolitical tensions. Wealth managers react.

Gold surged more than 2 per cent to all-time highs to just below $4,900 per ounce on Wednesday morning. The all-time highs came after US President Donald Trump renewed tariff threats against eight European countries – Denmark, Norway, Sweden, France, Germany and the UK – who have pushed back against his push to acquire Greenland for the US.

Trump warned of escalating levies on those countries, which are also NATO members, starting at 10 per cent in February and rising to 25 per cent by June. He has also threatened 200 per cent tariffs on French wine and champagne exports to the US.

Gold is seen as a safe haven, especially with concerns over tariff-induced inflation, a slowing US economy, steepening developed market bond yield curves, and a weaker dollar. Gold’s rally to record highs has also been driven by structural demand led by central banks in emerging economies. (See a recent article here about forces driving the metal.)

“Analysts now openly discuss the prospect of $5,000 gold, underscoring how stretched sentiment has become,” David Morrison, senior market analyst at fintech and financial services provider Trade Nation, said in a note. “While gold has trimmed some of its intraday gains, the broader backdrop remains supportive. These include the possibility that the US dollar continues to soften, particularly as the US Federal Reserve is expected to ease monetary policy further this year. On top of this, persistent geopolitical uncertainty continues to underpin the metal.”

“Silver, meanwhile, consolidated after approaching $96 per ounce on Wednesday. While price action has cooled, silver continues to benefit from haven demand and overall dollar weakness,” he continued. “For now, gold dominates the narrative, but silver continues in its role as a volatility-rich companion trade.”

Geneva-headquartered Swiss private bank Union Bancaire Privée has also increased its exposure to mining recently, highlighting the high demand for commodities such as copper. This rising demand extends to silver and tin needed for artificial intelligence, tech and renewables. Silver, which is important for industrial demand for use in solar power and electronics, is easier to access than gold. See here.

All the major US stock indices fell sharply on Tuesday reaching their worst daily session since October. It was the tech sector which was hit hardest – ending the session down 2.9 per cent – and this contributed to losses in the S&P 500 and the Nasdaq of 2.1 per cent and 2.4 per cent respectively. Equities slumped, while US Treasury yields spiked as investors trimmed their holdings of US assets, including the dollar.

Mathieu Racheter, head of equity strategy research at Swiss private bank Julius Baer, also highlighted that equity markets sold off sharply this week as US trading resumed, driven by renewed tariff threats and a spike in volatility. Rising global bond yields, led by Japan and partially spilling into US Treasuries, amplified the correction. “While near-term risks remain prevalent, several political, legal, and positioning constraints argue against a repeat of last year’s sharp drawdown,” Racheter said. Against this backdrop, he views the recent equity decline as a healthy market correction following the strong, largely uninterrupted rally since November.

Meanwhile, after the news of Canada and China striking a trade deal on Friday, David Roberts, head of fixed income at Nedgroup Investments, said the news took Canadian bonds higher to fair value versus US Treasuries. He believes that there is still room to rally but exited his position, moving from double weight to neutral Canada. Should Canadian bonds perform poorly on the current global bond negative moment, they’d be one of his top picks to buy back.

Under the move, China’s president Xi Jinping and Canadian prime minister Mark Carney announced lower tariffs. China is expected to reduce levies on Canadian canola oil from 85 per cent to 15 per cent by 1 March, while Ottawa has agreed to tax Chinese electric vehicle imports at the most-favoured-nation rate of 6.1 per cent. Carney has been trying to diversify trade away from the US, following the uncertainty caused by Trump’s tariffs. The deal could also see more Chinese investments in Canada.