Global markets slide as Trump threatens European tariffs; gold and silver soar

Global stocks fell on Monday and the dollar weakened against the yen and Swiss franc after U.S. President Donald Trump threatened new tariffs on European countries opposing his proposed takeover of Greenland.

Gold and silver jumped to record highs, while oil prices slipped on concerns that a potential U.S.-Europe trade war could hurt global growth. U.S. equity markets were closed for Martin Luther King Jr. Day, though S&P 500 and Nasdaq futures dropped more than 1.2%.

European markets declined broadly, with the STOXX 600 down 1.2% and major indexes in Frankfurt, Paris and London falling between 0.4% and 1.7%. Japan’s Nikkei slid 0.7%, while broader Asian shares were little changed.

Trump said the U.S. would impose an additional 10% tariff from February 1 on imports from several European nations, rising to 25% on June 1 if no Greenland deal is reached. EU leaders condemned the move and discussed possible retaliation.

"There is obviously a response (in financial markets) to the new tariff threats," said George Lagarias, chief economist at Forvis Mazars.

"It's highly likely that the White House will use the threat of tariffs consistently, even when deals have previously been agreed."

The tariff threats also loom over this week’s World Economic Forum in Davos.

In currency markets, the euro rose 0.4% to $1.1641 after hitting a seven-week low.

"The market reaction that we have seen so far is more on the back of the geopolitical risk than the tariff threat," said Tommy von Brömsen, FX strategist at Handelsbanken.

"Typically you see dollar strength in the wake of increased geopolitical risk but now we see dollar weakness as it is originating from the U.S."

Sterling recovered to $1.3422, while the dollar fell 0.7% against the Swiss franc and eased 0.2% versus the yen. Gold climbed to $4,689 an ounce and silver to $94.08.