Gold has made a strong breakthrough above the $5,000 per ounce mark, with bargain-hunting capital accelerating its return following a week of intense volatility in the precious metals market. Spot gold prices rose as much as 1.7% during the morning session, supported by multiple favorable factors. Japan's Prime Minister Takaichi Sanae won the election by an overwhelming margin, and her policy stance has reinforced market expectations that Japan will implement more accommodative fiscal policies and sustain a weaker yen. This has prompted investors to shift toward gold as a preferred store of value against currency depreciation. Meanwhile, silver prices also moved higher, creating a synchronized upward trend across the precious metals sector.

At the end of last month, precious metals experienced a sharp decline from historic highs, as a record-breaking rally appeared to have advanced too rapidly. As of Friday's close, gold was down approximately 11% from the all-time high set on January 29, but it still maintains a 15% gain for the year. The multi-year bull market accelerated in January, with a wave of speculative investment adding momentum to a market already supported by escalating geopolitical tensions and a revival of currency depreciation trades—investors are shifting from sovereign bonds and currencies to hard assets like gold.

Despite a turbulent week following the historic sell-off, gold has recovered roughly half of its losses. Financial institutions such as Deutsche Bank and Goldman Sachs remain optimistic about gold's rebound, citing long-term demand drivers as supportive factors for prices. Weekend data showed that China's central bank increased its gold holdings for the 15th consecutive month, highlighting the resilience of official demand.

Looking ahead, traders will closely monitor upcoming U.S. economic data for further clarity on the Federal Reserve's policy direction. The January jobs report, scheduled for release on Wednesday, is expected to show signs of labor market stabilization, while inflation figures will be published on Friday. Kevin Warsh, nominated by U.S. President Donald Trump as the next Fed chair, has expressed support for a new agreement between the Federal Reserve and the Treasury Department, deepening long-standing market concerns about the central bank's independence.

At the time of writing, gold was up 1.58% at $5,039.50 per ounce. Silver rose 3.38% to $80.65. Platinum and palladium also advanced. The Bloomberg Dollar Spot Index, which measures the U.S. currency's performance, was flat after closing down 0.4% in the previous trading session.