On January 21 (US time), the USD and stocks rebounded, while gold weakened after US President Donald Trump withdrew tariff threats and ruled out the possibility of using force against Greenland.
Mr. Trump affirmed that he does not want and will not use force, a statement that the market considers a signal to reduce geopolitical risks.
An immediate reaction appeared on Wall Street as the indices rose. The S&P 500 closed the session up 1.16%, the strongest increase in two months. European stock futures also rose, reflecting an improvement in global risk appetite.
The recovery of the greenback pulled the euro below the 1.17 USD mark. World gold prices fell by about 100 USD per ounce, falling from a record high of 4,887 USD to around 4,790 USD/ounce.
Previously, the precious metal benefited from safe-haven cash flow when concerns about escalating tensions surrounding Greenland escalated.
In the Asia-Pacific region, Australian and Japanese stocks rose about 1%, while the Kospi index in Seoul surpassed the 5,000-point mark for the first time. This development shows that the recovery momentum spread as investors adjusted the defensive positions they had built before.
After meeting with NATO Secretary-General Mark Rutte, Mr. Trump said that Western Arctic allies could reach a new agreement on Greenland, in response to his wishes regarding missile defense systems and strategic minerals. However, no details have been released and Mr. Mark Rutte later said that the issue of Greenland's sovereignty has not been mentioned.
Although psychology has improved, the market is still cautious as it has not completely removed safe-haven transactions. The VIX volatility index, also known as the "fear index", has fallen sharply to near the base level, while US Treasury bonds, once under selling pressure, have attracted buying again. US 10-year bond yields slightly decreased after falling in the previous session.
