Gold soared above US$5,000 an ounce for the first time on Monday – while silver jumped to US$110 an ounce – as a series of geopolitical tensions hit the US dollar.

Precious metals have risen in value in recent months as investors look for relatively safe places to invest.

“As long as fiscal dominance, geopolitical fragmentation and central bank credibility remain in question, precious metals will likely remain at the center of this perfect storm, not just as a hedge, but as an alternative,” said Daniela Hathorn, senior market analyst at Capital.com.

The US dollar fell to its lowest level since mid-November after the Japanese yen rose as much as 1.5 percent in Europe. Although the dollar has strengthened against the yen in recent months, it has fallen sharply in the past few days after officials in Japan and the US signaled they were ready to intervene to shore up the yen.

The dollar slipped to 153.88 Japanese yen from 155.01 yen; it was trading at around ¥158 last week. However, a weak yen is generally favorable for Japanese exporters, as it helps raise the value of their overseas earnings.

Although Japanese financial officials have not directly confirmed that such an intervention is underway, they have confirmed that they are working closely with the US on currency fluctuations.

“The chatter about intervention worked. Since Friday, the yen has seen a sharp jump on expectations that the Japanese authorities – possibly with US coordination – will step in,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

The yen has been under relentless pressure since Sanae Takaichi took over as Japan’s prime minister in October.

Takaichi made campaign promises to boost spending and cut taxes ahead of snap elections on February 8, raising concerns that Japan’s already strained finances could become even less manageable.

That pushed government bond yields to a record high, just as the Bank of Japan slowly raises interest rates to tackle inflation. As the yen strengthened, Japan’s Nikkei fell 1.75 percent.

As the US dollar sinks, gold hits a record

With the dollar falling to a four-month low against a basket of major currencies and volatility rising, gold attracted a fresh wave of capital, hitting another record high in what has been a strong rally over the past six months.

Gold was last up 2.1 percent at US$5,089 an ounce, extending its January gains to more than 17 percent, while silver rose nearly seven percent to $110 an ounce, up more than 50 percent this month.

“Gold obviously has a pretty compelling story, in terms of diversification of central bank reserves, which you would think is reinforced by all this talk of intervention and events in the US in general,” said Daiwa Capital Markets economist Chris Scicluna.

Possible US involvement in the Japanese currency market is “very significant,” Scicluna added.

“If the US authorities really want to weaken their currency, then it’s not just against the yen, but against other Asian currencies, while you have the ⁠broader theme of portfolio diversification outside the US which is also likely to play a role,” he said.

Markets are watching Trump’s threats to Canada

Apart from Japan’s Nikkei benchmark, global stocks were mostly lower on Monday. France’s CAC 40 fell nearly 0.2 percent in early trade to 8,127.93, while Germany’s DAX added less than 0.1 percent to 24,881.34. Britain’s FTSE 100 fell less than 0.1 percent to 10,138.76.

American markets opened higher. The S&P 500 rose 0.4 percent in early trading on Monday. The index recorded its second weekly loss in a row. The Dow Jones Industrial Average added 192 points and the Nasdaq composite rose 0.3 percent.

Elsewhere in Asia, South Korea’s Kospi fell 0.8 percent to 4,949.59. Hong Kong’s Hang Seng rose less than 0.1 percent to 26,765.52, after swinging earlier in the day, while the Shanghai Composite fell nearly 0.1 percent to 4,132.60.

Markets in Australia, New Zealand, India and Indonesia are closed.

Markets are closely watching earnings reports expected in the weeks ahead from various global companies, some of which could show the negative effects of recent US tariff policies.

US President Donald Trump provided temporary relief to markets last week when he appeared to back off threats to impose tariffs on European allies unless they let him take over Greenland.

But on Saturday, Trump threatened to impose 100 percent tariffs on goods from Canada.

Trump has warned he could raise tariffs if Canada signs a free trade deal with China. Prime Minister Mark Carney hit back by saying Canada has no plans for such a deal.

In 2024, Canada, like the United States, imposed a 100 percent tariff on electric vehicles from Beijing and a 25 percent tariff on steel and aluminum. China responded by imposing 100 percent import taxes on Canadian oil and canola meal and 25 percent on pork and seafood.

Breaking with the United States this month during a visit to China, Carney reduced his 100 percent tariffs on Chinese electric cars in exchange for lower tariffs on those Canadian products.

In other business on Monday, benchmark US crude rose 43 cents to US$61.50 a barrel. Brent crude, the international standard, rose 48 cents to $65.55 a barrel.