This week in the markets: geo-politics casts a shadow over the ongoing bull market; while precious metals continue to offer a safe haven for nervous investors.

Stand back from all the political noise and you’d think there was nothing much to worry about. The two dips in global stock markets in the autumn of 2023 and in April last year increasingly look like short-lived blips in a relentless rise in share prices since the October 2022 low.

In fact, the recovery from the 20% drop in share prices at the time of the tariff scare last spring has been harder and faster than in any other comparable period, with the exception of the bounce back from the collapse of the Long Term Capital Management hedge fund in 1998.

Over the last three and a bit years, the MSCI World index has risen from under 2,500 to just over 4,500. And while, in the US, the market leadership of the Magnificent Seven eased, the rest of the market is picking up momentum. Since the autumn, the proportion of companies in the broader equal-weighted US index that are rising faster than their 50-day moving average has more than doubled to nearly three quarters.

The parallel with 1998 is important because that marked the start of the dot.com bubble. There was a lot of talk about an AI bubble last year, but those worries have faded somewhat recently. The broadening of the rally, and the lower valuations this time around, are persuading many investors that this is a sustainable boom not a bubble.

The resilience of markets today is remarkable when you consider the geo-political backdrop. If someone had said at the start of the year that shares would shrug off the decapitation of political leadership in Venezuela and this weekend’s escalation of the Greenland stand-off between the US and its NATO allies in Europe, they would have struggled to make a convincing case for a continuing bull market.

But a disconnect has so far opened up between the political headlines and the market response. It remains to be seen whether investors calmness can be maintained through a crucial week in which Europe mulls retaliatory tariffs or limited US access to the EU market, and Donald Trump flies into the Davos economic summit.

At the time of writing, US futures markets are nervous ahead of a one day trading pause for Martin Luther King day. European shares are off, but not dramatically. The main action is once again in precious metal markets where gold and silver are hitting new highs as investors increasingly see them as a safe haven from political uncertainty.

Gold rose to a record high on Monday, up more than 2% to nearly $4,700 while silver again outperformed, rising more than 4% in response to Donald Trump’s threat over the weekend that he would impose an additional 10% tariff on countries, including the UK, that sent troops to a military exercise in Greenland.

The rise in the silver price in recent months has been extraordinary, with the junior precious metal up by around a quarter this year alone. Since last spring it has nearly trebled from around $35 an ounce to over $90 at the recent high.

It has been a perfect storm for silver, which mimics gold as a safe haven at times of uncertainty, but has its own fundamental drivers as well, with many more industrial uses than gold.

Demand for silver has risen sharply at the same time as supply has been constrained for several years. At the same time, rising stockpiles in the US due to worries over potential tariffs have drained inventories in London, where global prices are set. A similar story has also boosted the price of other industrial metals like copper.

But arguably the biggest driver of the silver price has been a flood of retail money chasing returns in a much smaller market than the one for gold. Unlike gold, where central bank holders of the metal can act as a seller of last resort to stabilise markets, silver is very responsive to investor demand and so vulnerable to big surges in price such as the one that has electrified markets in recent months.

The latest spat between the US and its military allies in NATO follows a show of solidarity from Europe with Greenlanders stated preference for remaining a semi-autonomous part of Denmark and their resistance to the White House’s stated ambition of acquiring the country for security reasons and to access its extensive mineral resources.

EU countries are considering €93bn worth of retaliatory tariffs or restrictions on US access to the single economic bloc in what is being viewed as the most serious rift in transatlantic relations for decades.

The stakes will rise in the middle of the week when President Trump is due to be at the Davos economic forum in the Swiss resort of Davos. He is expected to hold talks with European leaders. The Greenland crisis threatens to overshadow the original reason for Trump’s presence at the forum, to discuss the ongoing conflict in Ukraine.

Although Greenland and Davos will dominate the news agenda, investors continue to be more concerned with the more mundane arithmetic of earnings and valuations as the fourth quarter results season gets underway. It is early days yet, with only a few dozen companies having reported so far, but hopes are high that another quarter of better than expected results is in prospect.

The real earnings story may actually be outside the US where an acceleration in both developed and emerging non-US profits growth is well under way. The rise in earnings in Europe, Australia and the Far East (EAFE) is running at roughly twice that in the US. And the excess profit growth is feeding through into market outperformance, with shares in Japan, emerging markets and Europe outperforming not just US shares but even hot assets like gold in the year to date.