Gold prices rose above $5,000 an ounce for the first time on Monday as investors piled into safe-haven assets amid a weakening dollar, renewed currency market volatility and escalating geopolitical tensions.
The price of the precious metal rose 1.7 percent to $5,075.97 an ounce, extending a rally that has gained momentum this year as markets grapple with political uncertainty and shifting global power dynamics. Silver also gained, rising 5 percent to a new record high of $107.99 an ounce.
Demand for gold is supported by its traditional role as a store of value during times of economic, political and military instability. The rally has been fueled by a weaker U.S. dollar, making gold and silver cheaper for buyers in other currencies.
Currency markets were jittery after sharp swings in the Japanese yen reignited speculation about joint intervention by the United States and Japan to stabilize the currency. The yen gained more than 1 percent to 153.99 per dollar, rebounding after sharp swings late last week that marked the sharpest moves in years.
The prospect of coordinated action would be the first intervention between the United States and Japan in 15 years. Japan’s Prime Minister Sanae Takaichi said the government would take “necessary steps” to counter speculative currency movements ahead of snap elections on February 8.
“The possibility of coordination means that shorting the yen is no longer a one-sided bet,” said Prashant Newnaha, a strategist at TD Securities.
The dollar weakened against a basket of major currencies including sterling, which traded at $1.3665. Currency movements added pressure to stock markets, with Japan’s Nikkei 225 falling 1.7 percent.
Geopolitical concerns also weighed heavily on investor sentiment. Markets were unsettled after a turbulent week in which unease over Washington’s stance on Greenland briefly shook confidence, while new US sanctions on Iran revived fears of a wider conflict in the Middle East.
These tensions drove up oil prices, increased inflation concerns and increased demand for precious metals. Brent crude rose 0.5 percent to $65.43 a barrel, after rising 3 percent on Friday.
While President Donald Trump offered temporary market relief by easing some tariff threats, the U.S. has simultaneously tightened restrictions on Iranian oil shipments, heightening concerns about global energy supplies and regional stability.
Investors are now turning their attention to the Federal Reserve’s upcoming policy meeting. Interest rates are widely expected to remain unchanged, but the meeting will be overshadowed by a criminal investigation into Fed Chairman Jerome Powell, whose term is due to end in May.
Given the convergence of currency volatility, geopolitical risk and political uncertainty, analysts say the rise in gold prices reflects a broader flight to safety – and signals how fragile market confidence has become.
