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(Bloomberg) — Gold (GC=F) shook off an early decline as tensions over Greenland cooled, with Goldman Sachs Group Inc. adding $500 to its year-end price target on rising competition for bullion between central banks and investors.

Bullion traded near $4,830 an ounce, paring its losses after falling as much as 1.2% earlier on Thursday. US President Donald Trump withdrew a threat of tariffs against European nations after agreeing a “framework for a future deal” on Greenland during talks with North Atlantic Treaty Organization Secretary-General Mark Rutte.

Trump’s brinkmanship over Greenland had sparked a diplomatic crisis with NATO allies in Europe and spooked financial markets, adding to gold’s appeal. The precious metal is up nearly 5% for the week, with geopolitical tensions fueling the continuation of a blistering rally that has seen bullion smash successive records over the past year.

This recent instability reveals “the weaponization of commodities, energy, and supply chains” by dominant world powers, Nicky Shiels, head of research at precious metals refiner MKS Pamp SA, said in a note. This would support gold, she added.

Increased geopolitical risk has been accompanied by the Trump administration’s renewed attacks on the Federal Reserve, eroding trust in the dollar and supporting precious metals. The US president’s effort to fire Fed Governor Lisa Cook over unproven mortgage-fraud allegations was met with concern at a hearing on Wednesday, where Supreme Court justices said the move could upend the Fed’s independence and rattle markets. The court is set to rule by July.

The meeting between Trump and Rutte at the World Economic Forum in Davos, Switzerland, “took some of the temperature out of the US-EU tension,” said Nicholas Frappell, global head of institutional markets at ABC Refinery in Sydney. But there are still “plenty of dip-buyers” supporting the gold price, he added.

Goldman Sachs, meanwhile, lifted its year-end gold price forecast to $5,400 an ounce from a previous estimate of $4,900, citing intensifying demand from private investors and central banks. Analysts Daan Struyven and Lina Thomas said in a note dated Jan. 21 that risks were “significantly skewed to the upside because private-sector investors may diversify further on lingering global policy uncertainty.”