Precious metal markets carved historic territory on Monday as both gold and silver achieved unprecedented price levels while European Union officials developed response strategies. Gold climbed to an all-time record of $4,689 per ounce before settling at $4,671, representing a robust 1.6% gain. Silver demonstrated impressive strength, touching a historic peak of $94.08 per ounce and maintaining a substantial 3.6% advance to close at $93.15.
EU ambassadors representing the eight targeted nations are actively preparing retaliatory measures should Trump follow through on tariff threats, suggesting European response planning proceeds in parallel with diplomatic engagement efforts. This dual-track approach—simultaneously pursuing negotiation while preparing retaliation—reflects European determination to demonstrate consequences for tariff implementation while leaving diplomatic pathways open. The retaliatory preparation suggests Europe will not accept tariffs without response regardless of Greenland-linkage justifications.
European equity markets demonstrated widespread weakness, with France’s Cac index experiencing the steepest decline at 1.8%, followed by Germany’s Dax and Italy’s FTSE MIB each falling 1.3%. Britain’s FTSE 100 showed comparative resilience with a modest 0.4% loss. The automotive sector faced particularly acute pressure, with Volkswagen, BMW, Mercedes-Benz, and Stellantis collectively experiencing losses approaching or exceeding 2%.
The preparation of retaliatory countermeasures creates potential for escalating tit-for-tat tariff cycles if diplomatic resolution fails. European retaliation against American tariffs could trigger additional American responses, creating cascading trade war dynamics far exceeding initial 10%-to-25% framework. This escalation potential adds significant uncertainty beyond direct tariff impacts, as businesses must consider not only announced American tariffs but also potential European countermeasures and subsequent American counter-retaliation.
Economic forecasting models project tangible consequences for European growth, with baseline scenarios estimating 0.2 percentage point GDP reductions from direct American tariff impacts alone. However, addition of European retaliatory measures and potential American counter-responses could multiply effects substantially. British economists warn of GDP contractions potentially reaching 0.75%. Precious metal analysts emphasize that EU ambassadors’ active preparation of retaliatory measures—creating escalation potential beyond initial tariff framework—validates defensive gold and silver positioning, as retaliation-counter-retaliation cycles could produce far more severe disruption than initial American tariffs alone.