Khaberni - Gold rose to a new record level surpassing the $4800 barrier on Wednesday, supported by increased demand for safe havens and a decline in the dollar amid escalating geopolitical tensions after the United States and its NATO allies exchanged threats over President Donald Trump's attempt to take over Greenland.
In spot transactions, gold increased by 1.2 percent to $4818.03 an ounce by 0125 GMT, after touching a record level of $4836.24 earlier in the session. The American futures contracts for gold delivery in February (February) rose one percent to $4813.50 an ounce.
Trump said on Tuesday that he was “not backing down” from his goal of taking control of Greenland, and did not rule out the possibility of forcibly seizing the Arctic island. He added, "I think we will work on something that will make NATO very happy and us very happy, but we need it (Greenland) for security purposes," noting that the alliance would not be very strong without the United States.
Meanwhile, French President Emmanuel Macron said that Europe would not surrender to bullies or succumb to intimidation, in a sharp criticism of Trump's threat to impose heavy customs duties if Europe does not allow him to control Greenland.
The dollar fell near its lowest level in three weeks against the euro and the Swiss franc on Wednesday after threats from the White House regarding Greenland triggered a widespread sell-off of American assets. It is widely expected that the Federal Reserve (the US central bank) will keep interest rates unchanged at its meeting on January 27 and 28 despite Trump's calls to lower them.
Gold, which does not yield interest, usually rises in a low interest rate environment. Silver in spot transactions increased by 0.1 percent to $94.68 an ounce, after recording a record high of $95.87 on Tuesday.
Platinum in spot transactions increased by 0.9 percent to $2485.50 an ounce after recording a record high of $2511.80 earlier in the day, while palladium rose 0.4 percent to $1873.18.
