The PRICE of GOLD fell hard Wednesday afternoon in London, halving a record-high overnight jump as US President Donald Trump told the World Economic Forum in Davos, Switzerland that he won't use military force to seize the Arctic island of Greenland from Nato ally Denmark − a move swiftly tagged #taco on social media.

That acronym refers to the idea that, in the end, 'Trump always chickens out', a phrase coined by Financial Times journalist Robert Armstrong.

Earlier, however, and with Trump "no longer thinking only of peace" last weekend and telling reporters last night that "You'll find out" how far he would go to take Greenland, gold today fixed at London's 10.30am bullion auction around $4860 per Troy ounce, leaping $136 from 24 hours earlier to beat its previous 1-day record move of $130 made on 22 April last year.

That day saw gold touch $3500 per ounce for the first time ever as China's financial authorities warned of "irrational" speculation among retail traders and US President Trump attacked Fed chairman Jerome Powell for not cutting interest rates amid the 'Liberation Day' plunge in US and global stock markets.

But attacking Powell yet again in Wednesday's speech in Davos, "I don't have to use force, I won't use force," Trump said of Greenland.

"We probably won't get anything unless I decide to use excessive strength and force, where we would be frankly unstoppable. But I won't do that."

Gold sank $65 inside 90 minutes of today's 'Taco', bottoming at $4815 before rallying back to $4850 per Troy ounce − higher by 79.1% from Trump's second inauguration 12 months ago.

"The market has been burnt before by overreacting to tariff threats," said a note from German financial services giant Deutsche Bank yesterday, calling this week's stock-market and bond price drops muted compared with last year's Liberation Day falls.

"So far, bond investors do not seem to be taking the threats too seriously," agreed Swiss bank UBS's chief economist Paul Donovan, saying that US Treasury debt prices "weakened modestly."

"Trump is not going to willfully drive the markets or the economy into the ground. At least we hope not," said one financial pundit to Yahoo! Finance yesterday.

"The sheer volume" of tariff and military threats against Nato allies over Greenland, Gaza and other White House policies "will test the TACO theory" he went on.