(Feb 3): Gold rose, clawing back some losses after the abrupt unwinding of a record-breaking rally that had driven prices down 13% in just two days. Silver also advanced.
Spot gold climbed as much as 2.2% to above US$4,760 an ounce, after falling almost 5% in the previous session to extend a slump on Friday (Jan 30) that was the steepest in more than a decade. Silver climbed 3.7% to top US$82, after sliding 7% on Monday and posting a record intraday drop on Jan 30.
Precious metals surged to records last month in a rapid ascent that caught even seasoned traders by surprise. Investors piled into gold and silver on renewed concerns about geopolitical upheaval, currency debasement and threats to the Federal Reserve’s independence. A wave of buying from Chinese speculators supercharged the rally but this flipped on Friday as the US dollar rebounded.
The extent to which Chinese investors choose to buy the dip will play a key role in determining the direction of the market. Over the weekend, buyers flocked to the country’s biggest bullion marketplace in Shenzhen to stock up on gold jewellery and bars ahead of the Lunar New Year. China’s markets will be closed for just over a week from Feb 16 for the holidays.
Some banks have also backed gold to recover, with Deutsche Bank AG saying in a note on Monday that it was standing by a forecast for bullion to rally to US$6,000.
See also: Singaporeans queueing up to buy the dip in gold despite rout
Gold rose 2.2% to US$4,763.95 an ounce at 7.51am in Singapore. Silver advanced 3.6% to US$81.15. Platinum and palladium also climbed. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat after ending the previous session up 0.3%.
Uploaded by Arion Yeow
