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Gold surpasses $5,000 for the first time amid dollar weakness
Gold prices shattered the $5,000 barrier for the first time on Monday, soaring to a record high above $5,100 per ounce as investors flocked to safe-haven assets. This surge unfolded against a backdrop of a weakening US dollar and mounting speculation about a potential joint intervention by the United States and Japan to bolster the yen. Spot gold reached an unprecedented peak of $5,110.50 per ounce, extending a remarkable rally that has seen the precious metal climb more than 17 percent in the early weeks of 2026, following a 64 percent surge last year, its strongest annual gain since 1979. Silver mirrored the upward trajectory, pushing past $109 per ounce after breaking the $100 mark for the first time last Friday.
Currency market volatility fueled the precious metals boom, coinciding with a sharp yen rebound. The Federal Reserve Bank of New York contacted traders on Friday for rate checks on the dollar-yen exchange rate, a move directed by the US Treasury and often viewed as a precursor to direct intervention, raising hopes for the first coordinated US-Japan currency action in 15 years. The yen climbed to a two-month high of 153.89 against the dollar, reversing last week's slide toward 160. Japanese Prime Minister Sanae Takaichi warned over the weekend that authorities would take all necessary steps to counter speculative and highly abnormal movements.
The dollar's broad decline propelled gold higher amid geopolitical tensions and uncertainty over US policy direction. Investors sought defensive assets as President Donald Trump threatened 100 percent tariffs on Canada if it pursues a trade deal with China, injecting fresh volatility. Analysts note that the Trump administration has disrupted traditional norms, driving market participants toward gold as a reliable alternative. Concerns over a potential partial US government shutdown added pressure, with Senate Democrats refusing to back a federal funding bill without major changes ahead of its January 31 expiration.
Wall Street analysts remain bullish on gold's trajectory. Goldman Sachs last week raised its year-end forecast to $5,400 per ounce from $4,900, citing central bank purchases and private sector diversification. Bank of America analysts suggest prices could exceed $6,000. Meanwhile, Japan's Nikkei 225 index fell nearly 2 percent due to the stronger yen hurting exporters, while the euro hit four-month highs against the dollar. Markets now eye this week's Federal Reserve meeting and a possible announcement on Jerome Powell's successor.