[Gold Market Review] Major Market Reversal! Trump Sends Strong Signal on Greenland, Gold Price Drops $58 from Intraday High

#Gold Review# According to Kitco News on Wednesday (January 21), the gold market experienced extremely volatile trading, with prices hitting a record high. However, President Trump announced that a framework agreement regarding Greenland had been reached, retracting his previous threat to impose tariffs on eight European countries. This move spurred a stock market rebound and dampened market risk aversion. Although gold prices still closed higher, they retreated significantly from their peak.

#Greenland Dispute# After meeting with NATO Secretary General Mark Rutte at the World Economic Forum in Davos, Trump stated he would not impose tariffs on European countries opposing the U.S. acquisition of Greenland starting February 1, marking a notable shift in his stance. Earlier on Wednesday, Trump ruled out the possibility of using military force in the process of acquiring Greenland.

Spot gold closed up 1.4% on Wednesday at $4,830.56 per ounce; prices had touched $4,888.58 earlier in the session, setting a new record high, but plunged to $4,755.55 following Trump’s remarks.

Bob Haberkorn, senior market strategist at RJO Futures, said: “The news about European tariffs boosted stock markets, causing gold to give back most of its gains, and put some pressure on metals. However, this was merely headline-driven selling and will not alter the overall trend.”

Gold is considered a safe-haven asset during periods of economic and political instability. After surging 64% in 2025, it has risen more than 10% so far in 2026.

Meanwhile, in a lawsuit involving the Federal Reserve, both conservative and liberal justices of the U.S. Supreme Court expressed skepticism over Trump’s attempt to remove Fed Governor Cook.

Trump Agrees to Greenland Framework, Withdraws Tariff Threat

President Trump announced on Wednesday that he and NATO Secretary General Mark Rutte had formed a framework for a future agreement concerning Greenland and the entire Arctic region. He also declared that new punitive tariffs on European goods, originally set to take effect on February 1, would no longer be implemented. Following the announcement, U.S. stocks surged, reversing the ‘sell America’ trade, Treasury prices rebounded while yields fell, gold prices plummeted, and the U.S. dollar index strengthened. However, the White House has yet to disclose specific details of the so-called ‘framework agreement.’

On Wednesday, Trump stated that he and NATO Secretary General Mark Rutte had formed a framework for a future agreement related to Greenland and, based on these negotiations, would cancel the planned punitive tariffs on European goods scheduled to begin on February 1.

In a statement posted on Truth Social, Trump said: “Following a highly productive meeting with NATO Secretary General Mark Rutte, we have formed a framework for a future agreement concerning Greenland and, in fact, the entire Arctic region. If finalized, this deal will be a significant win for the United States and all NATO countries. Based on this understanding, I will not proceed with the tariffs set to take effect on February 1.”

He further added that discussions regarding how ‘Golden Dome’ involves Greenland are still ongoing, and more information will be released depending on the progress of the negotiations.

Trump also stated that Vice President Vance, Secretary of State Rubio, Envoy Witkov, and others will be responsible for subsequent negotiations and will ‘report directly to me.’

So far, the details of the so-called ‘framework agreement’ remain unclear. The White House has also not immediately responded to media requests for further information.

Denmark welcomed Trump’s statement that he would not seize Greenland by force, expressing hope to address Trump’s concerns about Greenland through dialogue, but reiterated that it would not negotiate on sovereignty issues.

The US dollar and US stocks rebounded.

Influenced by Trump’s latest remarks, the US Dollar Index rose on Wednesday, with significant gains against the euro and the Swiss franc.

The US Dollar Index (DXY), which tracks the dollar against six major currencies, increased by 0.12% to 98.76. The euro fell 0.36% against the dollar to 1.17, while the safe-haven Swiss franc dropped 0.77% against the dollar to 0.7958.

These remarks fueled a rebound in US stocks, with the S&P 500 index rising 1.2%, marking its largest single-day gain since November.

Matt Weller, Head of Global Market Research at StoneX, stated: ‘There has been a small relief rally in the markets. I truly believe that the specifics may not be that important, even if they never become clear. The short-term crisis seems to have passed, and now we wait to see what factors might influence market sentiment next.’

Louis Navellier, strategist at Navellier & Associates, said: ‘Due to the uproar caused by the US forcefully demanding to purchase Greenland from Denmark, Davos has turned into an emergency summit. Trump is like a bull in a china shop, so it will be interesting to see how European allies respond.’

Navellier also expressed that amidst the overwhelming news at Davos, he personally agreed with Trump’s statement that the stock market would double following Tuesday’s plunge triggered by issues related to Greenland.

Technical Analysis of Gold

FXStreet analyst Christian Borjon Valencia noted that geopolitical risks eased as Trump softened his stance on the Greenland issue, causing gold prices to retreat from their highs; however, lingering uncertainties continue to sustain safe-haven demand.

Trump did not elaborate on the specific content of the ‘framework,’ and the details of the agreement remain unclear.

Valencia stated that gold prices had previously hit a record high of $4,888 per ounce before pulling back, but the upward trend remains intact. If gold prices stay above $4,800 per ounce, this could pave the way for a challenge toward $4,900 per ounce. Once breaking through $4,900 per ounce, it may test the significant level of $5,000 per ounce.

(Daily chart of spot gold, source: FXStreet)

Valencia added that, on the other hand, if gold prices fall below $4,800 per ounce, the first support level will be the January 20 high of $4,766 per ounce. Below that support, the next target would be $4,700 per ounce.