Gold set for biggest daily gain since 2008, silver also rebounds
By Anmol Choubey
Feb 3 (Reuters) – Gold and silver prices rebounded sharply on Tuesday after sharp selling in the previous two sessions, with bullion on track for its biggest daily rise since November 2008 as bargain hunters stepped in amid resilient fundamentals.
Spot gold was up 5.2% at $4,906.82 per ounce as of 1:31 PM ET (1831 GMT), rebounding from Monday’s low of $4,403.24, but still trading below last week’s record high of $5,594.82.
US gold futures for April delivery rose 6.1% to $4,935 per ounce.
Silver rose 4.8% to $83.23 an ounce on Tuesday, after a record one-day drop of 27% on Friday and another 6% drop on Monday.
“I view the recent losses as a corrective to the long-term uptrend,” said Peter Grant, vice president and senior metals strategist at Zaner Metals. Many of the fundamentals that have driven gold higher in recent years remain firmly in place, he added.
“At this point we will likely see a period of consolidation with a significant support level on the downside at $4,400 and resistance on the upside probably around $5,100,” Grant said.
Precious metals have retreated sharply over the past two sessions after Kevin Warsh was named the next chairman of the Federal Reserve after Chairman Jerome Powell left his post in May. Investors expect Warsh to support interest rate cuts but the Fed to tighten its balance sheet. Additionally, CME Group increased margin requirements on precious metal futures, putting further pressure on prices.
Despite recent volatility, analysts generally expect the bull market to continue and the yellow metal to reach new highs later this year.
“We expect prices to continue their long-term rise at a more sustainable pace as investors remain extremely concerned about economic and political conditions,” said CPM Group managing partner Jeffrey Christian.
Gold is widely considered a “safe haven” and generally performs well in low interest rate environments.
Meanwhile, the U.S. Bureau of Labor Statistics said Monday that its closely watched January employment report will not be released this Friday due to the partial federal government shutdown.
Among other metals, spot platinum rose 3.4% to $2,194.05 per ounce, while palladium rose 0.4% to $1,727.03.
(Reporting by Anmol Choubey in Bengaluru; Editing by Diti Pujara and Krishna Chandra Eluri)
