The automotive sector led a sharp market decline in Europe following a surprise announcement from the US regarding potential trade tariffs linked to the status of Greenland. As major car manufacturers watched their share prices tumble, commodities markets moved in the opposite direction. Gold and silver prices skyrocketed, breaking previous records as capital rotated out of vulnerable industries and into physical assets.
Key players in the European auto industry saw their valuations erode significantly, with several major brands dropping more than 2%. The fear is that new levies on exports to the US will severely damage margins in a sector that is already facing numerous challenges. The proposed tariffs, which could start at 10% and rise to 25%, represent a substantial hurdle for any company relying on transatlantic trade.
In contrast, the precious metals market is experiencing a golden age. Gold futures jumped 1.7%, pushing the price to around $4,676, with spot prices hitting a ceiling of $4,689. Silver joined the rally, surging to a historic high of $94.08. Market watchers attribute this bullish momentum to the “fear factor,” as investors seek to insulate their portfolios from the unpredictability of US foreign policy.
The timeline for these potential tariffs is aggressive, with the first wave set to hit in early February. The list of affected countries includes the UK, France, Germany, and several Nordic nations. This broad scope implies that the economic pain would be felt across the entire European bloc, potentially slowing GDP growth and complicating the region’s economic recovery efforts.
Strategists suggest that while markets often dismiss political threats as negotiation tactics, the specificity of this ultimatum has caused genuine alarm. There are concerns that loopholes may exist—such as routing goods through non-targeted nations—but the prevailing mood is one of caution. Until clarity emerges, the auto sector is likely to remain under pressure while gold and silver shine.