Gold Surpasses $5,000 as Silver Rises Amid Dollar Decline
Gold and silver prices experienced significant gains at the start of trading on Monday, driven by a decline in the U.S. dollar, which reached its lowest point in several days. This shift comes as market participants await the upcoming U.S. employment report, which could shape the Federal Reserve's monetary policy direction moving forward.
Gold rose 1.4% in spot trading, reaching $5,029.09 per ounce at 00:37 GMT, following a nearly 4% increase during the previous Friday's session.
Additionally, U.S. gold futures for April delivery also climbed 1.4% to $5,051.00 per ounce, according to Reuters data.
In this context, silver continued its positive trend, increasing 2.5% in spot trading after a substantial 10% rise in the previous session. The weakness of the U.S. dollar has made dollar-denominated metals more appealing to international buyers.
The U.S. dollar fell to its lowest level since February 4, providing additional support to precious metal prices as investor expectations grow regarding potential monetary policy easing by the Federal Reserve in 2026.
On the monetary policy front, U.S. Treasury Secretary Scott Piesen indicated that he does not expect the Federal Reserve to rush into reducing its balance sheet, even with the appointment of Kevin Warsh, a critic of bond-buying policies, as the new Fed chair.
Meanwhile, Mary Daly, president of the Federal Reserve Bank of San Francisco, suggested that the U.S. economy may require one or two additional interest rate cuts to address labor market weaknesses.
Currently, investor sentiment reflects expectations for at least two interest rate cuts in 2026, each by 25 basis points, with the first cut potentially occurring in June.
Markets are closely monitoring the upcoming non-farm payroll report for January, set to be released on Wednesday after a four-day delay due to a partial U.S. government shutdown. This report is viewed as a critical indicator for the Federal Reserve's monetary policy direction.
In global markets, Asian stocks saw significant gains, reaching their highest levels following a decisive electoral victory for Japanese Prime Minister Sanai Takayuchi, bolstering expectations for continued expansive fiscal and monetary policies. Relief was also felt on Wall Street after a recent recovery.
In other precious metals, platinum rose 1.8% in spot trading to $2,134.18 per ounce, while palladium increased 1.8% to $1,737.75 per ounce.
With the dollar's decline and rising expectations for more flexible monetary policies, precious metal markets remain poised for upcoming economic data, particularly U.S. labor market indicators, which could play a crucial role in determining future price trajectories.
