Gold prices edged closer to the historic $5,000 mark on Wednesday as the precious metal breached $4,800 per ounce for the first time ever.
Meanwhile, silver prices also hovered near their record highs as safe-haven demand for the precious metals continued to rise.
Oil prices rose for most of the day as investors assessed a shutdown at two large fields in Kazakhstan and geopolitical tensions.
Base metals were generally showing strength on Wednesday. Copper, in particular, has recovered some ground after Tuesday’s turbulent session, which saw a noticeable spike in the tom-cash spread.
Gold hits record high
On Wednesday, gold prices on COMEX hit a new record high of $4,890.35 per ounce, breaching the $4,800 mark for the first time ever.
Safe-haven demand, fueled by increasing tension between the United States and NATO regarding Greenland, drove gold prices to a new record on Wednesday.
On Tuesday, Donald Trump reiterated his staunch desire to take control of Greenland, including the possibility of doing so by force.
The US President is scheduled to arrive at the World Economic Forum in Davos, Switzerland, on Wednesday.
He is expected to leverage the event to further his efforts to acquire the Arctic island, despite objections from European nations.
However, Danish Prime Minister Mette Frederiksen has stated her refusal to accede to Trump’s demands and relinquish Greenland.
Following White House threats concerning Greenland, the dollar index reached a two-week low, hovering there as a broad selloff impacted US assets, including the currency, Wall Street stocks, and Treasury bonds.
This depreciation in the dollar is significant because a weaker greenback makes metals priced in US dollars more affordable for international buyers.
“Analysts now openly discuss the prospect of $5,000 gold, underscoring how stretched sentiment has become,” said David Morrison, senior market analyst at Trade Nation.
While gold has trimmed some of its intraday gains, the broader backdrop remains supportive.
Silver prices have cooled somewhat, consolidating after an approach toward $96 per ounce. Despite this, silver continues to be supported by ongoing safe-haven demand and a generally weaker dollar.
“For now, gold dominates the narrative, but silver continues in its role as a volatility-rich companion trade,” Morrison said.
Oil moves higher
On Wednesday, oil prices climbed, driven by several factors: a temporary halt in operations at two major Kazakh fields, anticipation of an increase in US crude inventories, and new geopolitical tensions stemming from US tariff threats in connection with its efforts to gain control of Greenland.
The operator of the Tengiz oilfield, TCO, has declared force majeure on crude oil deliveries into the CPC pipeline system, according to a TCO letter reported by Reuters on Wednesday.
This news follows a Tuesday Reuters report, which cited three industry sources, suggesting that oil production at the two Kazakh fields could be halted for an additional seven to ten days.
US President Donald Trump reiterated his unwavering commitment to acquiring Greenland on Tuesday, declaring “no going back” on the goal.
This statement came as he continued to pursue the Arctic island, having vowed last week to impose escalating tariffs on European allies until the US is permitted to purchase it.
These developments, however, acted as a ceiling, limiting gains in the oil market.
“Crude oil has certainly broken out of its downtrend since August. Although the chart isn’t quite as bullish on a longer perspective,” Morrison said.
Fundamentally, the upside may still be capped by broader concerns around global growth and trade tensions.
At the time of writing, the price of West Texas Intermediate crude oil was at $60.28 per barrel, largely unchanged from the previous close. Brent was at $64.83 per barrel.
Base metals rise
The three-month copper contract was trading 0.9% higher at $12,901.20 per ton on the London Metal Exchange. The three-month aluminium contract was at $3,124.60 per ton, up 0.2%.
A weaker dollar boosted demand for the base metals as it made the commodities cheaper for overseas buyers.
Geopolitical tensions, particularly the renewed unease in Europe and the ongoing standoff concerning Greenland, continue to drive market sentiment.
This overall risk-off environment affected various asset classes.
However, commodities found some minor support as the dollar softened, with the greenback falling below 98.5.
Despite the weaker dollar, Treasury yields ticked up, reflecting the broader instability in global bond markets.
Rio Tinto’s recent production figures introduced a more stable fundamental outlook to the market.
The mining company saw a 5 percent increase in copper output during the fourth quarter, primarily driven by the ongoing expansion of underground operations at Oyu Tolgoi in Mongolia.
Furthermore, iron ore shipments rose by 7 percent; however, the total exports for the full year were at the lower boundary of the company’s projected guidance.
“While the broader base metals complex remains volatile, structural tightness continues to underpin prices,” Neil Welsh, head of metals at Britannia Global Markets, said in an emailed statement.
The pronounced backwardation in copper’s term structure suggests persistent near‑term demand, magnified by US inflows and dwindling inventories elsewhere.
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