Gold posts its biggest one‑day gain since 2008 as investors buy the dip
Gold and silver rebounded sharply after a dramatic two‑day selloff, with gold jumping nearly 5% and silver surging more than 8% as traders moved back into precious metals.
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By Torontoer Staff
Gold and silver both climbed sharply on Tuesday, recovering after their steepest two‑day slump in decades. Spot gold rose 4.9 per cent to US$4,895.69 an ounce by 1120 GMT, rebounding from Monday’s low near $4,403.24 and back toward the record high of $5,594.82 touched last week.
U.S. gold futures for April delivery were up 5.7 per cent at $4,918.10 an ounce. Silver jumped 8.6 per cent to $86.30 an ounce, after a 27 per cent one‑day plunge on Friday and a further fall of about 6 per cent on Monday.
Why prices swung so sharply
Traders and analysts described Tuesday’s move as a classic rebound after an overextended selloff. The sharp falls at the end of last week and into Monday left the market oversold, prompting bargain hunting and short covering. Decisions by regulators and policy signals from Washington also helped push traders back into precious metals.
The market was oversold after the announcement of U.S. President Donald Trump to nominate Kevin Warsh as the next Federal Reserve chairman. What we see today is a rebound.
Peter Fertig, Quantitative Commodity Research
Investors had reacted to the announcement that Kevin Warsh would be nominated to lead the Federal Reserve by pricing in expectations about future policy. Some traders expect Warsh to lean toward rate cuts, while also tightening the Fed’s balance sheet, a combination that can support the U.S. dollar and complicate price moves for gold.
Heightened volatility earlier in the week was amplified by the CME Group raising margin requirements on precious metal futures. That forced some traders to reduce positions, which added downward pressure before the buying resumed.
What analysts are watching next
Technicians point to key retracement levels as guides for the next moves. Gold cleared a first retracement hurdle at $4,858, shifting attention toward $5,000, which represents a 50 per cent retracement of the recent slump. Silver faces higher short‑term resistance, with comparable levels around $90.58 and $96.52, according to Saxo Bank’s commodity team.
Gold has now cleared its first retracement hurdle at $4,858, shifting focus toward $5,000, the 50 per cent retracement of the latest slump. For silver, the equivalent levels sit higher at $90.58 and $96.52.
Ole Hansen, head of commodity strategy, Saxo Bank
Macro data and policy developments remain key. The U.S. Bureau of Labor Statistics said the closely watched employment report for January would not be released on its usual schedule because of a partial government shutdown. Delays in economic data can increase uncertainty and spur trading in safe‑haven assets such as gold.
Other metals and market context
Moves in gold and silver were echoed in other precious metals. Spot platinum climbed about 5.1 per cent to $2,228.84 an ounce, after trading near a record earlier this year. Palladium rose roughly 4.5 per cent to $1,796.44 an ounce.
How this matters for investors
Sharp swings in precious metals highlight the volatile nature of these markets. For people who hold or are considering exposure to gold and silver, short‑term price turbulence can present opportunities and risks. Increased margin requirements and rapid price moves are reasons to reassess leverage and position sizing.
- Understand your exposure: holdings can include physical bullion, coins, exchange‑traded funds and mining equities, each with different risk profiles.
- Mind leverage and margins: futures and some ETFs carry margin and can amplify gains and losses.
- Watch policy and data: central bank appointments, interest rate expectations and economic releases drive sentiment.
- Consider liquidity: extreme moves can widen bid‑ask spreads and make short‑term trading more costly.
This is not investment advice. Investors should consult a financial professional before making or changing investments.
Outlook
Despite the recent volatility, several analysts remain bullish on the broader trend in gold. Many expect the metal to continue its upward trajectory and to test fresh record highs later in the year if the macro backdrop and monetary policy expectations remain supportive.
For now, the market is focused on how policy signals, margin settings and delayed economic data will interact with investor demand. Traders will be watching whether this rebound holds, or if another round of selling creates new entry points or further volatility.
In short, Tuesday’s gains erased some of Monday’s losses, but the path ahead for precious metals will depend on policy moves in Washington and risk appetite across global markets.
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