Gold and silver prices rose on Tuesday as turmoil in Japan’s government bond market rattled global investors and fueled demand for safe-haven assets. Spot gold traded near $3,240 per ounce, recovering from last week’s pullback and continuing its strong performance for the year. Silver also gained, with spot prices at $32.39 per ounce, up 0.11% from Monday and maintaining a double-digit year-to-date gain. The gold/silver ratio edged higher to 99.95, reflecting gold’s relative outperformance. Physical demand remains robust, driven by ongoing geopolitical tensions, a weaker dollar, and persistent concerns over fiscal stability in major economies, including the U.S. and Japan.
The sharp move in precious metals was amplified by a dramatic selloff in Japanese government bonds. Yields on Japan’s 20-year bonds soared to 2.555%, the highest since 2000, after a failed auction saw demand collapse to decade lows. The Bank of Japan’s gradual withdrawal of support and warnings from policymakers—who compared Japan’s fiscal situation to Greece at the height of its crisis—have triggered a rush out of super-long bonds, steepening the yield curve and raising fears of broader financial instability. With Japanese institutional buyers stepping back and global investors seeking shelter, gold and silver are likely to remain well-bid until confidence returns to sovereign debt markets.
