Gold rebounds above $5,000 an ounce; silver snaps back after wild swings
Spot gold rose 1.5% to $5,033 an ounce in Asian trade, recovering sharply from a brief dip to $4,403 an ounce last week when profit-taking and technical selling rattled bullion markets.
The rebound came alongside a broader rally in risk assets after US equities staged a late recovery on Friday (February 6) and Asian benchmarks surged on optimism around Japan’s reflationary policy push.
Silver outperformed, jumping 2.4% to $79.82 an ounce after an exceptionally volatile session last week in which prices whipsawed from a 15% intraday plunge to a 9% closing gain. Traders said the metal had been caught in a leverage squeeze over the past fortnight, triggering margin calls and forced liquidations before bargain hunters stepped in.
Market positioning now hinges on a busy week of US data that could shape Federal Reserve policy. Payrolls, retail sales and inflation figures are due, with investors betting that signs of cooling growth will keep a June rate cut firmly on the table. Lower yields typically reduce the opportunity cost of holding non-yielding assets such as gold and tend to weaken the dollar, both of which are supportive for bullion.
Currency moves also remained in focus. The dollar held steady near 157.2 yen amid expectations of higher Japanese government spending, while the euro and pound traded in tight ranges. A softer dollar backdrop generally improves gold’s appeal to non-US buyers.
Analysts cautioned, however, that technical resistance could cap near-term gains.
Jateen Trivedi, Vice-President (Research Analyst – Commodity & Currency) at LKP Securities, said: “Immediate resistance is now seen near $4,925 an ounce, with volatility likely to persist around key data triggers.”
His view suggests that while momentum has turned positive, prices could see sharp swings as markets react to US data releases and central-bank signals.
–With Reuters inputs
