Precious Metals Rally After Sharp Selloff

Gold and silver prices continued their rebound on Wednesday following historic losses last week. Spot gold rose 2.4% to $5,054.6 per ounce, while gold futures gained 3.4% to $5,100. Spot silver surged 5.8% to $90 per ounce, with silver futures climbing 8% to $90.16. The rebound follows a nearly 10% one-day drop in gold and a 30% collapse in silver, marking silver’s worst daily performance since 1980.

“Gold’s rebound reflects renewed dip buying after one of the sharpest corrections in precious metals in years,” said Ewa Manthey, commodities strategist at ING. Investors are seeking stability as the U.S. dollar softened and broader markets stabilized.

Market Drivers: Dollar, Interest Rates, and Politics

Precious metals gains are influenced by fluctuations in the U.S. dollar, interest-rate expectations, and political uncertainty ahead of the mid-term elections. The ICE U.S. Dollar Index was steady at 97.382 but down from a January high of 99.39. Analysts caution that near-term volatility is likely to persist.

Goldman Sachs forecasts gold reaching $5,400 by the end of 2026, driven by continued central bank accumulation and higher ETF purchases as the Federal Reserve cuts rates. Bank of America projects an even higher $6,000 target, noting supportive fundamentals despite rapid price gains and rising volatility.

Mining Stocks Follow Precious Metals

London-listed mining companies extended gains, with Rio Tinto up 1% and Anglo American 0.7% higher. The FTSE 350 Precious Metals and Mining Total Return Index rose 2% to 34,963, reflecting renewed investor interest in the sector.

Conclusion: A Cautious Optimism

While the rebound in gold and silver presents opportunities for investors, experts warn that volatility will remain high in the near term. The trajectory of U.S. interest rates, dollar strength, and geopolitical developments will shape future gains, suggesting a measured approach for precious metals investment.