A decisive victory for Japan’s ruling coalition sparked a sharp rally in silver markets on Monday, with the precious metal gaining over 4% to breach the $80 per ounce threshold once more. The election result has fueled expectations of substantial new economic stimulus, reinvigorating risk appetite across financial markets after a period of significant volatility.

Risk Sentiment Revives on Stimulus Hopes

Markets interpreted the weekend’s parliamentary election as a strong mandate for continued fiscal expansion. Prime Minister Sanae Takaichi’s Liberal Democratic Party (LDP) secured an absolute majority in the lower house. This political certainty has activated a global “risk-on” trading environment, with investors anticipating significant government spending programs.

The bullish sentiment lifted assets across the board. As Japan’s Nikkei 225 index climbed to fresh record highs, silver capitalized on the prospect of increased global liquidity. During Monday’s session, the metal traded between $81.50 and $82.00.

A Look Back at Recent Turbulence

Monday’s advance represents a notable stabilization following an exceptionally volatile period. After hitting record highs near $121 an ounce in late January, silver experienced a severe correction. Market experts point to two primary drivers for that sharp decline:

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• Margin Requirement Hikes: The CME Group repeatedly raised margin requirements for futures contracts, triggering forced liquidations of speculative positions.
• Federal Reserve Uncertainty: Former President Donald Trump’s nomination of Kevin Warsh to lead the U.S. central bank created doubts about the future path of interest rates.

Analysts also note that a structural supply deficit projected for 2026 continues to provide fundamental support for silver prices.

Upcoming U.S. Data and Geopolitical Context

Trader attention is now shifting toward key U.S. employment figures due for release. Consensus forecasts point to solid job creation and a steady unemployment rate hovering around 4.4%. Concurrently, the market consensus anticipates the Federal Reserve will hold interest rates steady in March, with initial cuts being priced in for either June or September. A softer U.S. dollar at the start of the week provided additional support for dollar-denominated precious metals.

Geopolitical tensions persist in the background. Talks between the United States and Iran concluded in Oman on Friday without an agreement on uranium enrichment. Any significant deviation in the upcoming U.S. jobs data from expectations is likely to dictate the next major move for the silver price.

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