Gold was higher again on geopolitical concerns and came $112 away from hitting the $5,000 mark.
XAUUSD – Weekly Chart
The price of XAUUSD has continued its ascent with a three-day surge toward $4,900. The bulls are in control, and dip buying remains the safest strategy.
Gold’s powerful rally has continued after President Trump’s threats over Greenland. Investors are looking for a safe have on fears that it could lead to retaliatory moves over Europe’s US debt holdings.
A Danish pension fund is said to be selling $100 million worth of US bonds. The fund’s investing chief said they are concerned about the condition of the US government’s finances and rising credit risk. They admitted that the Greenland standoff made the decision easier.
“It is not directly related to the ongoing rift between the US and Europe, but of course that didn’t make it more difficult to take the decision,” management said.
But investors are worried that others will follow suit, triggering another sovereign debt crisis. Anders Schelde claims America’s “poor government finances” are the main reason to divest its holdings. Foreign investors hold around 20–25% of all outstanding US debt, totalling around $8–$9 trillion. European investors are the largest regional foreign holders of US long-term Treasuries. Eurozone investors alone account for around one-fifth of total foreign long-term Treasury holdings.
China and Japan are other large holders of US debt, and while tensions with China are possible, Japan is more of an ally to the US. However, Japan is dealing with its own debt problems, and problems could spread globally if the US continues to rattle other nations.
Treasury Secretary Scott Bessent rejected the idea that European governments could aggressively sell American debt, saying the move would “defy logic”.
Silver prices also hit a new record high above $95, but there was a pullback later in the session after Trump said he would not use force to acquire Greenland. Stocks also jumped on the comments, but the bearish mood could persist amid uncertainty in global relations.
Yardeni Research sees gold hitting $6,000 this year, with $10,000 as a possibility by 2030 due to massive government deficits and international stress. The average price among investment bank analysts is $4,600. Swiss bank UBS has the highest target at $5,400 for the current year.
