Gold and silver prices surged sharply on Tuesday, with gold heading for its strongest daily rise since November 2008, as investors rushed back into precious metals following their steepest two-day sell-off in decades.
Spot gold climbed 5.3 percent to $4,913.59 per ounce by 14:34 Cyprus time. The metal rebounded from Monday’s low of $4,403.24 per ounce, while last week’s record high of $5,594.82 per ounce remains intact for now. US gold futures for April delivery rose 6.1 percent to $4,936.20 per ounce.
Silver posted even sharper gains, jumping 9 percent to $86.60 per ounce on Tuesday. The rally followed a record one-day drop of 27 percent on Friday and a further 6 percent decline on Monday.
Market Drivers and Fed Expectations
Despite expectations that Kevin Warsh, as the next chair of the Federal Reserve, would favour interest rate cuts, investors also anticipate a tightening of the Fed’s balance sheet. Such a move typically supports the US dollar and has added complexity to market expectations around precious metals.
At the same time, CME Group raised margin requirements on precious metals futures contracts, a development that initially added pressure to prices. Analysts, however, continue to view gold’s broader trend as positive and expect fresh record highs later in the year.
Wider Market Context
Adding to market uncertainty, the US Bureau of Labor Statistics announced on Monday that the closely watched January employment report will not be released this Friday due to a partial federal government shutdown.
Among other precious metals, spot platinum rose 5.4 percent to $2,235 per ounce, having reached a record high of $2,918.80 on 26 January. Palladium also advanced, gaining 4.8 percent to $1,801.50 per ounce.
Source: CNA