Record Highs in Gold and Silver Prices: Implications for Investors and the Stock Market in Oman
Gold and Silver Prices Surge Amid Trade Tensions
هونغ كونغ – On Monday, gold and silver reached record highs as most equity markets declined, triggered by renewed trade war concerns after U.S. President Donald Trump threatened tariffs against several European nations. This ultimatum arose from their opposition to the U.S. proposition to purchase Greenland.
Gold Prices in Oman
- 24K: RO58.2
- 22K: RO54.4
- 18K: RO43
This month, President Trump intensified existing geopolitical tensions by asserting that the U.S. would take control of the North Atlantic island, citing national security concerns. Following unsuccessful discussions aimed at resolving the "fundamental disagreement" regarding the Danish territory, he announced plans to impose new tariffs on eight countries that refuse to comply with his demands.
He stated that starting February 1, 10% tariffs would be applied to Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. This rate would escalate to 25% by June 1 if these nations did not consent to the acquisition.
The announcement elicited a swift response from the affected countries, which jointly declared, “Tariff threats undermine transatlantic relations and risk a dangerous downward spiral.”
This action jeopardizes a trade agreement between the United States and the European Union established last year. German Foreign Minister Johann Wadephul remarked on ARD television, “I don’t believe that this agreement is possible in the current situation.”
In response, aides to French President Emmanuel Macron indicated he would urge the EU to activate an unprecedented "anti-coercion instrument" against the U.S. if Trump proceeds with his threats. This mechanism would allow the EU, comprising 27 countries with a total population of 450 million, to limit imports of goods and services from the U.S.
Bloomberg reported that EU member states are considering retaliatory tariffs on approximately EUR 93 billion ($108 billion) worth of U.S. goods. The potential onset of a trade war between these economic powerhouses has stirred markets, prompting safe-haven assets to extend their gains, which had initially surged following Trump’s threats against Iran and the U.S. removal of Venezuelan President Nicolas Maduro.
Gold prices peaked at $4,690.59, while silver reached $94.12. In equity markets, Tokyo, Hong Kong, Shanghai, Sydney, Singapore, and Wellington saw declines, while Seoul and Taipei experienced modest gains. Futures traded in both European and U.S. markets plummeted, and the dollar weakened against its counterparts, with the euro, pound, and yen all appreciating.
Charu Chanana, chief investment strategist at Saxo Markets, noted, “The next signpost is whether this moves from rhetoric to policy, and that is why the concrete dates matter.” She emphasized that the decisions made in Europe are just as critical, stating, “There is a difference between merely mentioning the anti-coercion instrument as a signal and formally pursuing it as an action.”
Even if the immediate tariff threats are negotiated down, Chanana warned of the ongoing structural risks that may arise, including increased trade fragmentation, more politicized supply chains, and heightened policy risks for companies and investors.
In economic news, there was little significant reaction to reports that China’s economy expanded by 5% last year, aligning with its target, although growth in the last quarter slowed sharply compared to the previous quarter. Investors in Seoul and Taipei were largely unfazed by a warning from U.S. Commerce Secretary Howard Lutnick, who cautioned that South Korean chipmakers and Taiwanese firms not investing in the U.S. could face 100% tariffs unless they increase production within the country.
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مع gold and silver hitting record highs, businesses in Oman may find safety in precious metals amidst rising geopolitical tensions and trade war fears. Investors should consider diversifying into safe-haven assets while remaining vigilant about potential trade policy shifts, which could impact supply chains and increase risks for sectors reliant on global trade. As tariffs become a looming threat, entrepreneurs should explore local production opportunities to mitigate future disruptions and leverage the favorable market conditions created by international instability.
