Gold prices surge past $5,000 for the first time

Today’s headlines

What’s happening: Gold prices topped the $5,000 mark this morning, extending its record-breaking rally.

What happened: The yellow metal was driven by increased safe-haven demand amid ongoing trade and geopolitical tensions.

Weakness in the US dollar lent further support to gold prices this morning.

Why it matters: Gold prices jumped 64% last year, driven by safe-haven demand, easing in the US monetary policy and continued purchases by central banks. Record inflows into ETFs (exchange traded funds) also provided support to gold prices. The yellow metal continued its rally into 2026, gaining more than 16% year to date.

President Donald Trump has been at loggerheads with US allies over his attempts to take over Greenland. Although a framework agreement has somewhat diffused the tensions between the US and NATO, Trump said over the weekend that he would have “everything” he wants.

Over the weekend, Trump shifted his focus to Canada, threatening to impose a 100% tariff on Canadian imports if the country finalises a trade ⁠deal with China.

Meanwhile, Russia and Ukraine ended a second day of negotiations on Saturday ‌without ‌reaching any agreement, with more talks expected next weekend. Russian continued to launch airstrikes in Ukraine, cutting off power for over a million people in sub-zero temperatures.

Weakness in the US dollar provided a further boost to gold prices, as a softer greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell more than 0.4% to 97.17 this morning.

Spot prices for gold jumped 1.9% to trade at $5,077.04 an ounce this morning.

In other metals trading, silver prices surged 4.7% to $107.8025 an ounce, breaching $100 for the first time on Friday. Spot prices for platinum climbed 3.77% to $2,874.23, while palladium prices gained 2.1% to $2,057.18 this morning.

What to watch: Investors will continue monitoring the ongoing geopolitical tensions, which are expected to significantly impact gold prices ahead.

The markets today

The Japanese yen in focus today ahead of a basket of major economic reports this week

Context: The Japanese yen gained to its strongest mark versus the US dollar in more than a month this morning amid intervention concerns.

Details: Markets are pricing in the rising risk of coordinated intervention by the US and Japan to provide support to the yen. On Sunday, Japan’s Prime Minister Sanae Takaichi announced plans to take necessary steps to counter speculative moves in the market for stabilising the Japanese yen.

The New York Fed conducted rate checks for the USD/JPY rates with dealers on Friday, raising chances of a potential joint intervention in the forex market to halt the yen’s plunge.

Weakness in the US dollar provided a boost to the Japanese currency amid rising geopolitical and trade concerns. The US dollar came under pressure due to speculations of Trump soon replacing Fed chief Jerome Powell with a dovish successor. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell more than 0.4% to 97.17 this morning.

The USD/JPY forex dipped more than 1.1% to 153.96 this morning, while the Nikkei 225 fell 1.99% to trade at 52,812.45.

What to watch: Investors await the release of economic data on unemployment rate, retail sales and industrial production, later in the week. Analysts expect Japan’s unemployment rate to remain unchanged from the previous month at 2.6% in December.

Industrial production is expected to decline 0.4% in December, following a 2.7% plunge in November. Retail sales in Japan, which grew by 1.0% year-over-year in November following a 1.7% surge in the previous month, are expected to gain 0.7% in December.

Other Markets: US trading indices closed mixed on Friday, with the S&P 500 and Nasdaq 100 up by 0.03% and 0.34%, respectively, and the Dow Jones index down by 0.58%.

The news shaping the markets

Ukrainian forces announced a massive attack on the border region of Belgorod over the weekend, impacting energy infrastructure in Russia. The news sent the USD/RUB pair higher in forex trading this morning.

Saudi Arabia’s trade surplus widened to SAR 23.0 billion in November from SAR 13.1 billion in the year-ago period, which exerted pressure on the USD/SAR forex pair.

India agreed to cut tariffs on car imports from the European Union to 40%, which sent the USD/INR pair higher in forex trading this morning.

Colombia’s leading economic indicator jumped 3.08% year-over-year in November. This being an acceleration from the previous month’s 2.95% growth exerted pressure on the USD/COP forex pair.

China’s foreign direct investment declined 9.5% to ¥747.77 billion in 2025. This marked a significant deceleration from the sharp 24.7% plunge recorded in the previous year, which sent the USD/CNY pair lower in forex trading this morning.

What else to watch today

Spain’s PPI (1200 UAE Time), Germany’s Ifo business climate (1300 UAE Time), Ifo current conditions (1300 UAE Time) and Ifo expectations (1300 UAE Time), Brazil’s FGV consumer confidence (1500 UAE Time), Brazil’s current account (1530 UAE Time) and foreign direct investment (1530 UAE Time), Mexico’s unemployment rate (1600 UAE Time) as well as US durable goods orders (1730 UAE Time), Chicago Fed National activity index (1730 UAE Time), non-defence goods orders (1730 UAE Time) and Dallas Fed manufacturing index (1930 UAE Time).