By Sherin Elizabeth Varghese and Ashitha Shivaprasad (Reuters) -Gold prices fell on Wednesday after a U.S.-Japan trade deal eased market uncertainty, while strong industrial demand and a supply shortage drove silver to its highest level since September 2011.

Carmakers led the rally in Japan, where the Nikkei Stock Average surged 3.5% to its highest level in a year.

Japan is facing trade and political uncertainty after a historic defeat for the prime minister’s ruling party. Shigeru Ishiba is trying to buy time for his premiership following this past weekend’s election, which left the ruling bloc three seats short of a majority in the upper house.