Gold prices have rebounded above $US5000 an ounce after a week of significant volatility in the precious metals market. Spot gold climbed as much as 1.7 per cent in early trading. This recovery was further supported by the landslide election victory of Japan’s Prime Minister Sanae Takaichi, which is expected to lead to looser fiscal policy and sustained pressure on the yen. Investors often turn to bullion as a store of value when currencies weaken. Silver also experienced gains.
The price surge follows a crash from all-time highs at the end of January, which ended a record-breaking rally. At Friday’s close, gold was down approximately 11 per cent from its all-time high reached on January 29, yet it remained up 15 per cent for the year. The multiyear bull run gained momentum in January, fuelled by speculative investment and increasing geopolitical tensions. This led investors to shift from sovereign bonds and currencies into hard assets like gold. US Treasury Secretary Scott Bessent attributed last week’s price swings to Chinese traders.
Despite recent choppy trading, gold has recovered roughly half of its losses since the rout. Financial institutions such as Deutsche Bank and Goldman Sachs maintain a positive outlook on bullion, citing long-term demand drivers. Recent data indicates that the Chinese central bank has extended its gold purchases for a 15th consecutive month, highlighting strong official demand.
As of 8.28am in Singapore (11.28am AEDT), gold rose 1.3 per cent to $US5028.77 an ounce. Silver also advanced, increasing by 1.7 per cent to $US79.18.
