After an unusually volatile week for precious metals markets, bargain hunting has returned, with gold prices rising above $5,000 an ounce. Gold prices rose as much as 1.6% in early trading, also boosted by Japan's current Prime Minister Sanae Takaichi's resounding victory in the House of Representatives election.
This further strengthens the market's expectations for fiscal policy to become looser and the yen to remain under pressure, which is usually positive for gold. At the close of trading last Friday, gold prices were about 11% lower than the all-time high hit on January 29, but they were still up 15% year-to-date.
Traders are also watching upcoming U.S. economic data to get a clearer picture of the Fed's policy direction. The January jobs report on Wednesday is expected to show signs of stabilizing in the labor market, while inflation data is due on Friday.
As of 8:20 Singapore time, gold prices rose 1.4% to US$5,034.67 per ounce; silver rose 2.2% to US$79.52 per ounce; platinum and palladium also rose.
Japanese stocks rose sharply on Monday, hitting a record high. Earlier, Japanese Prime Minister Sanae Takaichi won an important election.
Japan's ruling Liberal Democratic Party reportedly has a more than two-thirds absolute majority in the 465-seat lower house.
Sri Kochuguvindan, senior research economist at Aberdeen Investment Company, said: "For the market, if Sanae can achieve a decisive victory, that will be the best outcome in the medium term. Because strategic investment and tax reform will boost the stock market."
The Nikkei 225 Index rose more than 5% in early trading, surpassing 57,000 points for the first time, while the Topix Index also hit a record high.
US President Donald Trump congratulated Takaichi Sanae on his election victory in a post on the real social networking site.
The election follows political turmoil last year, when Japan's Liberal Democratic Party lost its majority in the upper house, and also suffered defeat in lower house elections in 2024, prompting then-Prime Minister Shigeru Ishiba to resign last September.