Author: Anmol Chaubey
Feb 3 (Reuters) – Gold and silver prices rebounded sharply on Tuesday after sharp selloffs in the previous two sessions, with gold on track for its biggest one-day gain since November 2008 as bargain hunters stepped in due to strong fundamentals.
Spot gold was up 5.2% at $4,906.82 an ounce as of 1:31 pm ET (1831 GMT), rebounding from Monday’s low of $4,403.24 but still below last week’s all-time high of $5,594.82.
U.S. gold futures for April delivery rose 6.1% to $4,935 an ounce.
Silver soared 4.8% to $83.23 an ounce on Tuesday, after falling a record 27% in a single day on Friday and falling a further 6% on Monday.
“I view the recent losses as a correction in a longer-term uptrend,” said Peter Grant, vice president and senior metals strategist at Zaner Metals, adding that many of the fundamentals that have driven gold prices higher in recent years remain firm.
“Right now, we are likely to see a period of consolidation, with significant support on the downside at $4,400 and resistance on the upside at around $5,100,” Grant said.
The precious metal has fallen sharply over the past two sessions as Chairman Jerome Powell steps down in May and Kevin Warsh is named as the next Fed chair. Investors expect Warsh to support a rate cut but tighten the Fed’s balance sheet. In addition, CME Group increased margin requirements for precious metals futures, further depressing prices.
Despite recent volatility, analysts generally expect the bull market to continue and gold could hit new highs later this year.
“As investors continue to be extremely focused on economic and political conditions, we expect prices to resume long-term gains at a more sustainable pace,” said Jeffrey Christian, managing partner at CPM Group.
Gold is widely viewed as a safe haven and typically performs well in low interest rate environments.
Meanwhile, the U.S. Bureau of Labor Statistics said on Monday that the closely watched January jobs report will not be released on Friday due to the partial federal government shutdown.
Among other metals, spot platinum rose 3.4% to $2,194.05 an ounce, and palladium rose 0.4% to $1,727.03 an ounce.
(Reporting by Anmol Choubey in Bengaluru; Editing by Diti Pujara and Krishna Chandra Eluri)
