Markets Today: Gold Breaches $5100/oz, Yen Intervention Risks Grow, Dollar Slides. USD/JPY Test 100-Day MA

Gold prices hit a new all-time high on Monday, climbing above $5,100 per ounce. Market participants continue to flock to safe havens as global uncertainty grows. This year alone, gold prices have jumped more than 18%.

Other precious metals like silver and platinum also saw significant price increases as part of this trend. Spot silver advanced 4.8% to $107.903, after hitting a record of $109.44. Spot platinum climbed 3.4% to $2,861.91 per ounce, after hitting a record high of $2,891.6 earlier in the session.

Geopolitical risks continue to grow and include a loss of confidence in the US government. Recent unpredictable decisions by President Trump regarding trade have made market participants nervous.

These include threats to put massive taxes (tariffs) on goods from Canada and France, as well as ongoing tensions with Iran. Because people are worried these political moves could harm the global economy, they are moving their money out of riskier investments and into gold.

In the currency world, the Japanese yen grew stronger against the US dollar. This happened because there are rumors that the US and Japan might step in together to help stabilize the currency market.

This potential intervention is big news because it hasn't happened in 15 years. Meanwhile, Japan is facing its own internal stress as its new Prime Minister, Sanae Takaichi, plans to increase spending and cut taxes, which has made market participants worried about Japan's national debt.

Because of all this uncertainty, global stock markets are struggling. Stock prices fell in Japan, and futures for markets in the US and Europe are also down.

European stock markets stayed mostly flat on Monday morning. Market participants were hesitant to make big moves because of recent global political tension and the upcoming meeting of the US Federal Reserve later this week.

While the main European index (the STOXX 600) rose very slightly, different industries saw mixed results; insurance companies saw some gains, while travel and leisure companies saw their stock prices drop.

Much of this caution comes from the market's reaction to President Trump’s recent threats regarding trade and taxes (tariffs). Even though those specific threats were taken back, markets are still worried that using tariffs as a bargaining tool could become a common trend that hurts global trade in the long run.

Additionally, while most people expect the US Federal Reserve to keep interest rates the same this week, there is a lot of talk about whether the central bank is able to make decisions independently from political pressure.

In specific company news, car manufacturers saw a small dip in their stock prices, even though reports suggested India might significantly lower the taxes it charges on cars imported from Europe.

Meanwhile, the French food company Danone saw its shares drop after it announced a recall of certain baby formula products in specific markets.

On the FX front, The US dollar index weakened on Monday, hitting its lowest level in four months.

At the same time, the Japanese yen surged to its strongest point since November, jumping more than 1% against the dollar. The euro also performed well, reaching a four-month high.

These big moves happened because of reports that the New York Federal Reserve was checking uSD/JPY currency rates, an action usually seen as a sign that the US and Japan might step in together to control the market.

Japanese officials have been careful with their words. While the Finance Minister, Satsuki Katayama, refused to comment on whether they were checking rates, another top official, Atsushi Mimura, confirmed that Japan is working closely with the US and will take the necessary steps to manage the currency.

Because the dollar was losing value, other currencies like the British pound, the Australian dollar, and the New Zealand dollar also climbed to their highest levels in months.

Currency Power Balance

Oil prices reached their highest levels in over a week this past Friday.

This jump happened because US President Donald Trump increased pressure on Iran by placing new sanctions on the ships that carry its oil. He also announced that a group of US warships, which he called an "armada," is moving toward the Middle East.

These political tensions have made market participants worried that the global supply of oil could be interrupted.

At the same time, oil production in the US has been slowed down by severe weather. A major event called Winter Storm Fern hit the country, forcing many oil and natural gas facilities to shut down. This storm has put a lot of stress on the power grid and reduced the amount of oil being produced.

As a result of both the situation in Iran and the storm at home, the prices for Brent crude and US West Texas Intermediate (WTI) oil both rose by nearly 3% by the end of the week last week with further gains in early trade today.

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Data is largely thin today with Geopolitical developments likely to remain key. Greenland, tariffs, US-Iran among other discussions may be key drivers today.

On the European front we do have German IFO expectations and a host of ECB policymakers on the docket.

Heading into the US session, it is a quiet one with focus likely to be on US-Japan intervention developments while the US dollar risk premium remains elevated.

From a technical standpoint, USD/JPY has finally had a deep pullback after edging higher since the October 2025 low around the 146.60 handle.

The pullback has materialized thanks to a weaker US Dollar and growing fears of joint intervention between the US and Japan. This would be the first intervention of its kind in 15 years.

Markets have grown weary of the BoJ issuing intervention comments in recent years but the rumors of US involvement have added further credence to the reports this time around.

USD/JPY is down some 600-odd pips since Friday but is currently testing the 100-day MA. The question is can this level or is a retest of 150.00 incoming?

Time will tell.

Key levels of support on the downside include the 100-day MA at 153.57 before the 151.53 and 150.00 levels come into focus.

A recovery from here may face opposition around the 154.60 handle before the 156.27 and 157.90 handles come into focus.

Wishing you all a positive trading week ahead.

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