Trade wars, a weaker dollar, and a market that’s rediscovering the appeal of safe haven assets

Gold and silver have started the week doing what they’ve done a lot lately: climbing to fresh all-time highs. Gold briefly nudged above £3,500/oz, while silver pushed beyond £70/oz, fuelled by renewed geopolitical tensions and a market that’s quickly remembering the value of a reliable hedge.

The latest spark came over the weekend, after President Trump reignited trade war concerns with Europe, threatening tariffs of 10%, rising to 25%, across multiple European nations. The move is reportedly tied to pressure on US allies to support his push to acquire Greenland. Unsurprisingly, European leaders reacted sharply, with reports of the European Parliament freezing ratification of a trade deal agreed last summer, while some voices call for retaliation.

Why tariffs matter to gold (even before they happen)

Tariffs aren’t just about import costs. They feed uncertainty across markets, supply chains, corporate margins, growth expectations, and political stability all take a hit. And importantly, markets don’t wait around politely for the economic data to confirm the damage. When escalation risk rises, defensive capital tends to move early. That’s where gold steps in. Not as a headline-chaser, but as the portfolio counterweight people reach for when the noise level goes up and the outlook becomes harder to price.

A weaker dollar adds fuel to an uncertain week ahead

Trade war tension has also weighed on the US dollar, giving both metals another boost. With the dollar softer, precious metals often become more attractive globally, and this week’s move has reflected that pattern clearly. US markets are closed for Martin Luther King Jr. Day, but volatility may not take the day off. With investors bracing for a turbulent week, safe-haven demand could remain supportive.

Whilst European leaders have so far restrained from stating there will be retaliatory tariff hikes, there is some concern major US tech firms could be targeted, a sector that has been central to US growth. Any hit there wouldn’t stay contained for long.

However, some analysts believe the tariff threats are part of a familiar negotiation strategy: escalate loudly, extract concessions, then ease off once the deal is “improved”. Markets may even get a relief rally if that happens. But between now and then, it can still be a bumpy ride and precious metals rarely struggle for attention when that’s the case.

Silver stays in the spotlight

Silver continues to give gold a good run for its money, and it’s not hard to see why. It wears two hats: monetary metal and industrial workhorse. That gives it additional support, especially when supply chains remain strained and demand stays persistent. Even with technical indicators suggesting silver is overbought, the market doesn’t seem particularly put off. The bullish case remains straightforward: limited supply, strong investor demand, strong industrial demand and no quick way to fix the imbalance.

The takeaway

This week’s price action is being driven less by one neat data point and more by a familiar cocktail: policy uncertainty, geopolitical tension, weaker dollar, and defensive positioning.

Gold and silver don’t need perfect conditions to perform. They tend to do their best work when the world becomes harder to understand.

And right now, it’s not exactly a simple read.