Gold surged past $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 climbed 1.7 per cent to $5,075.97 an ounce, extending a rally that has gathered pace this year as markets grapple with political uncertainty and shifting global power dynamics. Silver also surged, jumping 5 per cent to a fresh record high of $107.99 an ounce.
Demand for gold has been underpinned by its traditional role as a store of value during periods of economic, political and military instability. The rally has been reinforced by a softer US dollar, which makes gold and silver cheaper for buyers using other currencies.
Currency markets were on edge after sharp moves in the Japanese yen reignited speculation of a joint intervention by the United States and Japan to stabilise the currency. The yen strengthened more than 1 per cent to 153.99 per dollar, rebounding after violent swings late last week that marked its sharpest moves in years.
The prospect of coordinated action would be the first US–Japan intervention in 15 years. Japan’s prime minister Sanae Takaichi has said the government would take “necessary steps” to counter speculative currency moves ahead of the February 8 snap election.
“The possibility of coordination means shorting the yen is no longer a one-way bet,” said Prashant Newnaha, a strategist at TD Securities.
The dollar weakened against a basket of major currencies, including sterling, which was trading at $1.3665. The currency moves added pressure to equity markets, with Japan’s Nikkei 225 falling 1.7 per cent.
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 rattled confidence, while fresh US sanctions targeting Iran revived fears of a wider conflict in the Middle East.
Those tensions pushed oil prices higher, adding to inflationary concerns and bolstering demand for precious metals. Brent crude rose 0.5 per cent to $65.43 a barrel, following a 3 per cent jump on Friday.
While President Donald Trump offered temporary market relief by easing some tariff threats, the US has simultaneously tightened restrictions on Iranian oil shipments, reinforcing concerns over global energy supply and regional stability.
Investors are now turning their attention to the upcoming policy meeting of the Federal Reserve. Interest rates are widely expected to remain unchanged, but the meeting is overshadowed by a criminal investigation involving Fed chair Jerome Powell, whose term is due to end in May.
With currency volatility, geopolitical risk and political uncertainty converging, analysts say the surge in gold reflects a broader flight to safety — and signals just how fragile market confidence has become.
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Gold breaks $5,000 an ounce for first time as investors flee to safety