The ‘sell America’ trade dominates market sentiment, with gold and silver hitting record highs simultaneously.
Amid a sharp rise in risk aversion, both gold and silver hit new all-time highs on Tuesday.
According to Zhitong Finance, gold and silver both hit record highs on Tuesday amid a sharp rise in risk-averse sentiment. As Trump threatened to impose new tariffs on European allies, market concerns over the global trade and geopolitical outlook deepened, leaving investors with increasingly limited options for defensive assets.
Trump’s tariff threat is related to his attempt to acquire Greenland. Jim Wyckoff, senior analyst at Kitco, noted that this statement has “shaken” the foundation of the alliance between the United States, the European Union, and NATO.
Despite the resurgence of “sell America” trades as the top market headline, Adrian Ash, research director at BullionVault, told the media that this wave of anxiety has spilled over more broadly. “Trump’s latest blow to the established world order is scaring off all investors,” he added, noting that “gold and silver have reached new highs across all currencies” amid widespread declines in global stocks and bonds.
In contrast to the strength of precious metals, U.S. assets came under pressure. The weakening of U.S. Treasuries pushed the 10-year yield to rise to 4.3% intraday, while the three major U.S. stock indexes posted their largest single-day declines of the year, with the Nasdaq falling more than 2.3%, the S&P 500 dropping over 2%, and the Dow Jones Industrial Average declining more than 1.7%. In this environment, buying gold was seen as a way to diversify exposure to U.S. Treasuries and the dollar, a theme often referred to as the “currency devaluation trade.”
Michael Armbruster, co-founder and managing partner of Altavest, stated that while the news-driven stimulus surrounding Greenland may quickly fade, the medium-term trend for precious metals remains upward. He believes that the core driver of the current rally is demand: gold is primarily supported by central bank purchases, while silver is being propelled by rapidly expanding industrial demand.
Armbruster pointed out that whether it’s the construction of data center infrastructure or Samsung’s upcoming production of silver-based batteries, these factors are boosting silver demand, while supply growth struggles to keep pace. “For investors, a more rational strategy is to buy on dips rather than chase news headlines.”
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