Post by : Saif Rahman

In response to U.S. President Donald Trump’s recent threats regarding Greenland, global investors are reallocating their funds towards safer assets. These comments have ignited concerns about potential geopolitical conflicts, which could undermine NATO, destabilize global markets, and erode trust in the U.S. dollar.

Investors first turned to gold and European defense stocks, leading to a more than 4% rise in gold prices last week, achieving a new peak. Simultaneously, European defense stocks recorded their highest weekly gains in over five years, hitting record levels.

Trump has expressed a desire to acquire Greenland, either through negotiations or force, with Greenland firmly opposing this stance and receiving backing from Denmark, Europe, and Canada. While earlier statements of this nature were often dismissed, the recent U.S. military activities in Venezuela have caused investors to take such geopolitical threats more seriously.

Experts highlight that gold remains a traditional safe haven during turbulent times, and European defense stocks are rising as the region may need to enhance its security budgets. Companies such as Germany’s Rheinmetall and Sweden’s Saab experienced significant gains last week.

However, positioning for the long term remains challenging. The unpredictability of political risks presents difficulty in valuation, as while rare, they hold substantial potential for impact. Should the U.S. undertake military action in Greenland, there could be an initial surge into Treasuries and the dollar, although long-term confidence in U.S. governance could decline.

#Global News