European equities edged lower and precious metals climbed to fresh record highs on Wednesday, January 21, as investors grew cautious ahead of US President Donald Trump’s address at the World Economic Forum in Davos, where his push to seize Greenland has dominated debate and strained ties with key allies.
Market nerves have been heightened after Trump threatened tariffs of up to 25 percent on several European countries, including France, Germany, Britain and Denmark, in response to their opposition to his Greenland ambitions. The warning triggered talk of retaliation in Davos, where European Commission President Ursula von der Leyen said the EU would be “unflinching” in its response.
US Treasury Secretary Scott Bessent urged European leaders to avoid “reflexive anger” and instead engage directly with Trump to hear his case. With the US president due to speak later in the day, investors awaited signals on whether he would intensify the standoff.
Analysts warned that risk appetite could deteriorate further if Trump maintains his stance. Precious metals surged as investors sought safe havens amid fears the dispute could escalate.
Global markets have been under pressure all week. Wall Street’s main indices slid sharply on Tuesday after US trading resumed following a long holiday weekend, though futures pointed to a possible rebound on Wednesday.
In Asia, Tokyo stocks declined while Hong Kong and Shanghai advanced. Japanese government bond yields eased after Finance Minister Satsuki Katayama called for calm following a recent spike linked to election-related tax cut pledges.
In corporate news, Burberry shares jumped about five percent in London after the British luxury brand reported stronger sales, driven by improving demand from China.
