Stocks Plunge, Gold Rockets Over $4,800 As Wall Street’s Fear Gauge Jumps 8%

[Ben Graham]

The Dow Jones Industrial Average sank 800 points Tuesday, over 1.5%, as a global stock sell-off deepened following intensifying U.S. threats over ownership of Greenland, which is a territory of Denmark, a NATO ally.

President Trump announced a 10% import tariff starting February 1 on all goods sent to the U.S. from eight NATO nations—Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands and Finland. Those eight nations recently sent troops to Greenland for military exercises there. On June 1, the U.S. tariffs are set to rise to 25%. European nations are considering retaliatory tariffs that could cover items from Boeing airplanes to Kentucky bourbon.

Markets React

Gold rocketed to a record high above $4,800, silver also reached a new all-time peak, while the U.S. dollar tumbled, and Wall Street’s Fear Gauge, the CBOE Volatility Index or “VIX,” jumped 8%, topping the 20 level.

The tech-heavy NASDAQ Index plunged 2%, and the S&P 500 lost 1.8%. Bitcoin also fell, dropping below $90,000, while smaller cyber tokens like Ether and Solana fell 7% and 5.3%.

All in all, investors around the world widely dumped stocks and U.S. Treasuries, while turning to the safety of precious metals as global markets adjust to a shifting political and military order. President Trump’s comments around taking ownership of Greenland have turned the post-war international rules-based order upside down.

What’s At Stake

Investors are piling into the safety of precious metals as a hedge against worst-case scenarios, including a breakdown of the NATO alliance, a full blown trade war between the U.S. and Europe or even a European inspired market volatility event intended to pressure the U.S. to back down from Greenland aspirations.

Global leaders are meeting in the Swiss alpine town of Davos this week for the annual World Economic Forum.

What Global Leaders Are Saying

At the forum this week, Canadian Prime Minister Mark Carney said middle-power countries need to stop pretending the rules-based order is still functioning. The Prime Minister urged nations to rally together against threats from great powers.

French President Macron warned of a shift to a “world without rules.”

European Commission President Ursula von der Leyen said of the new Greenland tariffs: “The European Union and the United States have agreed to a trade deal last July. And in politics as in business – a deal is a deal. And when friends shake hands, it must mean something.”

U.S. Treasury Secretary Scott Bessent downplayed claims that Europe would dump U.S. Treasuries in retaliation for the Greenland-inspired tariffs.

Why Investors Are Turning to Gold

For hundreds of years, people have turned to the safety and security of gold and silver during times of war, political unrest, and economic uncertainty. In today’s modern world, gold retains its status as a currency without a country. Gold has recognized value in every nation on the planet, is easily transportable, and is a highly liquid market, meaning it can be sold at any time. What’s more, gold—unlike the U.S. dollar—is not attached to any government’s monetary aspirations, printing presses or debts and liabilities.

That’s why central banks, hedge funds and individual investors have been pulling funds out of risky assets like stocks and moving money into the safety of metals. The latest geopolitical trigger point—Greenland—has driven a fresh up leg in the historic precious metals run.

Gold $5,000 the Next Big Target for the Precious Metal

Wall Street firms expect the record-setting run in gold and silver will continue this year. A recent survey of Wall Street firms projected an average of 17% gold gains in 2026. The next big target for gold lies at $5,000 an ounce. Several firms, including UBS, Yardeni Group, and Jeffries Group, see potential for the yellow metal to climb to $5,400 or even $6,000 or beyond this year.

Markets are moving. Stocks are selling off. There’s still time to rebalance your portfolio and reduce your exposure to stocks before today’s sell-off becomes a full-blown market crash. Gold and silver are in uptrends and are still climbing. Call Blanchard today to explore how an increased allocation to precious metals can help protect and grow your wealth for today and tomorrow. Explore the buying process here.

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