Equities sink, gold and silver hit records as Greenland fears mount

Asian markets extended losses Tuesday while precious metals hit fresh peaks on fears of a USEU trade war fuelled by Donald Trumps tariff threat over opposition to his grab for GreenlandAfter a bright start to the year fuelled by fresh hopes for the artificial intelligence sector investors have taken fright since the US president ramped up his demands for the Danish autonomous territory citing national securityWith Copenhagen and other European capitals pushing back Trump on Saturday said he would impose 10 percent levies on eight countries including Denmark France Germany and Britain from February 1 lifting them to 25 percent on June 1The move has raised questions about the outlook for last years USEU trade deal while French President Emmanuel Macron has called for the deployment of a powerful unused instrument aimed at deterring economic coercionIn response US Treasury chief Scott Bessent said Monday that any retaliatory EU tariffs would be unwiseTrump ramped up his rhetoric against France on Tuesday warning he would impose 200 percent tariffs on French wine and champagne over its intentions to decline his invitation to join his Board of Peace set up to oversee the rebuilding of GazaThe prospect of another trade standoff between two of the worlds biggest economic powers has fuelled a rush to safety and dealt a blow to risk assetsAsia equities extended Mondays losses Tokyo Hong Kong Sydney Seoul Singapore Mumbai Manila and Wellington were all down while Shanghai was flat Taipei Bangkok and Jakarta edged up London Paris and Frankfurt were also sharply lower for a second successive dayGold hit a fresh record of dollar 472276 and silver also peaked touching dollar 9473Meanwhile Treasury yields rose amid a move out of US assets fuelled by the uncertainty sparked by Trumps latest volleyJapanese government bonds yields also rose with that on the 40year note hitting the highest since it was launched in 2007 after Prime Minister Sanae Takaichi called snap elections Monday and pledged to cut a tax on food for a twoyear periodThe announcement fuelled fresh worries the government will borrow more cash at a time when questions are already being asked about the countrys financesHer cabinet approved a record 1223trillionyen dollar 768 billion budget for the fiscal year from April 2026 and she has vowed to get parliamentary approval as soon as possible to address rising prices and shore up the worlds fourthlargest economyEyes are now on Davos Switzerland where the US president is expected to give a speech to the World Economic ForumDavos now becomes the theatre that matters Not for soundbites but for whether the adults step back into the room wrote Stephen Innes of SPI Asset ManagementIf this turns sour volatility will not stay bottled What would normally be a Ukrainefocused week risks being hijacked by a far more destabilising question namely whether the transatlantic alliance is being stresstested in publicA NATO fracture even a rhetorical one is not something markets are trained to shrug offKey figures at around 0815 GMTTokyo Nikkei 225 DOWN 11 percent at 5299110 closeHong Kong Hang Seng Index DOWN 03 percent at 2648751 closeShanghai Composite FLAT at 411365 closeLondon FTSE 100 DOWN 08 percent at 1011601Eurodollar UP at 11691 dollars from 11641 dollars on MondayPounddollar UP at 13477 dollars from 13428 dollarsDollaryen UP at 15839 yen from 15809 yenEuropound UP at 8675 pence from 8671 penceWest Texas Intermediate UP 02 percent at 5958 dollars per barrelBrent North Sea Crude DOWN 03 percent at 6376 dollars per barrelNew York Dow Closed for a holidayThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever