Gold Futures Experience Wild Swings as Trump Addresses Davos

Gold futures underwent exceptional volatility on Wednesday as markets reacted to President Donald Trump's remarks at the World Economic Forum in Davos, Switzerland, with prices swinging more than $130 per ounce in a single trading session.

The precious metal reached an all-time futures high of $4,891 per ounce at approximately 1:30 AM ET during overseas trading. After gold went on trading in a relatively narrow range through the early morning hours, gold peaked again at $4,883 at the opening of New York trading at 9:00 AM ET before embarking on a tumultuous descent.

The first significant selloff began mid-morning, with gold dropping from $4,880 to $4,800 by noon—a decline of $80 in just three hours. Market analysts attributed this movement to President Trump's address to European Union leaders, in which he appeared to moderate his earlier aggressive rhetoric regarding Greenland. While stating he would not consider using military force to acquire the Danish territory, Trump simultaneously warned that the United States would "obliterate nations" if provoked, creating a mixed message that left markets uncertain.

The most dramatic move came at 2:25 PM ET, when gold experienced a swift and severe drop to the day's low of $4,757—a nearly 2% decline in just fifteen minutes. This represented a fall of approximately $134 from the session's peak, highlighting the extreme volatility gripping the market. This was likely tied to Trump’s social media post in which he stated that he no longer is threatening tariffs on some European countries and is in the process of making a deal with them regarding Greenland. This took much of the safe haven demand out if the market as geopolitical pressures seemingly cooled between the US and the EU. This also was good for both economies as well as for keeping inflation tamed and therefore helpful for future rate cuts.

Throughout the afternoon, gold continued exhibiting a technical pattern of steep declines followed by partial recoveries, each rally failing to reclaim previous levels. This created a classic downtrend structure of lower highs and lower lows, suggesting mounting selling pressure despite periodic buying interest.

Despite the chaotic price action, gold managed to settle at $4,836 per ounce, representing a gain of $67 or 1.41% for the session. The ability to close well above the day's lows demonstrated resilient underlying demand for the precious metal, even as traders navigated the uncertainty created by geopolitical developments. Market participants will be closely watching for further policy statements from the Trump administration that could continue to drive price swings in the precious metals complex.

Wishing you as always good trading,