Gold Rebounds Sharply After Historic Sell-Off, Posts Strongest Daily Rise in Over 16 Years

Gold prices staged a powerful comeback on Tuesday, surging more than five percent and heading for their largest single-day gain since late 2008 as precious metals rebounded from one of the steepest two-day sell-offs seen in decades.

Spot gold climbed 5.8% to $4,935.56 an ounce by 0818 GMT, recovering sharply after falling to a two-session low of $4,403.24 on Monday. The precious metal had earlier touched a record $5,594.82 before the recent downturn.

U.S. gold futures for April delivery also jumped, rising 6.6% to $4,958.50 per ounce, reflecting renewed investor demand following last week’s heavy liquidation.

Market analysts said the rebound suggests prices are stabilizing after what many described as an overextended and volatile rally. Kyle Rodda, senior market analyst at Capital.com, noted that recent price levels appear more aligned with underlying fundamentals following weeks of erratic trading.

“The market had been behaving quite irrationally for a period, and current prices bring gold and silver back to levels seen earlier in the second half of January,” Rodda said.

Gold had posted a dramatic advance in recent months, gaining nearly 13% in January, its strongest monthly performance since November 2009, while silver surged to an all-time high of $121.64 last Thursday.

Silver mirrored gold’s rebound on Tuesday, leaping 10% to $87.40 an ounce after suffering its largest one-day drop on record last Friday, when prices plunged 27%, followed by a further 6% decline on Monday.

The sharp sell-off in precious metals had been triggered by a stronger U.S. dollar after President Donald Trump nominated Kevin Warsh as the next chair of the U.S. Federal Reserve, a move markets interpreted as supportive of tighter monetary policy.

According to analysts, the nomination boosted confidence in the dollar, placing pressure on gold and silver prices, while the CME Group’s decision to raise margin requirements on precious-metal futures further amplified last week’s volatility.

Meanwhile, the U.S. Bureau of Labor Statistics announced that the highly anticipated January employment report will not be released this Friday due to a partial federal government shutdown, adding another layer of uncertainty to financial markets.

Other precious metals also posted strong gains. Platinum rose 5.7% to $2,242.55 an ounce, rebounding after hitting a record $2,918.80 on January 26, while palladium advanced 5.3% to $1,811.39 per ounce.

Despite recent turbulence, analysts remain optimistic, with expectations that gold and silver could reach new record highs later this year as demand for safe-haven assets persists.