Gold and silver rebound sharply after recent sell-off in markets

Gold prices recovered on Tuesday, climbing over 5.7% after a steep two-day decline triggered by political uncertainty. Silver also saw a strong rebound, gaining more than 9% as precious metals markets experienced volatile trading.
Precious metals markets staged a significant rebound on Tuesday, with gold prices rising sharply to recoup some of the steep losses recorded in the previous trading sessions. The recovery indicates ongoing volatility as investors digest recent political and monetary policy developments.
Price Movements and Market Context
Spot gold surged over 5.7% to reach $4,926.4 per ounce by 0755 GMT. This follows a notable sell-off on Friday and Monday that pushed the price briefly below the $4,500 level. Similarly, silver prices demonstrated a stronger recovery, jumping 9.3% to $86.6 per ounce, outperforming gold in the day's rally.
Trigger for the Previous Decline
The recent downturn in gold was largely attributed to market reactions to US political news. On Monday, President Donald Trump announced his selection of former Federal Reserve governor Kevin Warsh as his nominee for the next chair of the central bank. This announcement influenced market expectations regarding future monetary policy, leading to a sell-off in non-yielding assets like gold.
Volatility and Investor Sentiment
The sharp reversal highlights the continued sensitivity of precious metals to US fiscal and monetary policy signals. Gold often serves as a hedge against uncertainty, but it can also experience selling pressure when news suggests potential shifts in interest rate policy or financial stability. Tuesday's rebound suggests some investors viewed the previous decline as an overreaction or buying opportunity.
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