Gold rose for a second day, rebounding above $5 000 an ounce as dip buyers snapped up precious metals following a historic collapse from record highs.<\/p>\n
Bullion climbed as much as 2.6% on Wednesday, after a gain of more than 6% in the previous session, as a risk-on tone returned to markets and the US dollar weakened. The yellow metal was roughly 10% below an all-time high hit on January 29 \u2014 but was up around 17% for the year. Silver also advanced.<\/p>\n
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\u201cForced sales have likely run their course in precious metals,\u201d Daniel Ghali, a senior commodity strategist at TD Securities, said in a note. \u201cThe intense volatility over the last week could certainly keep retail participants on the sidelines, removing an increasingly important cohort of buyers,\u201d he said.<\/p>\n
Read: Read: Gold bounces with silver as dip buyers crowd in following slump<\/p>\n
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Precious metals soared last month in a rally underpinned by speculative momentum, geopolitical upheaval and concerns about the Federal Reserve\u2019s independence. However, market watchers had warned that the advances had been too large and too swift. The surge came to a sudden halt at the end of last week, with silver seeing its biggest daily drop on record and gold plunging the most since 2013.<\/p>\n
Chinese funds and Western retail investors had built up large positions in precious metals, and further fuel was added by investors piling into leveraged exchange-traded products and a wave of call-option buying. A sudden collapse during Asian trading hours on Friday continued into the early part of this week.<\/p>\n
Read: Gold, platinum and our mighty rand<\/p>\n
Mainland China\u2019s four largest gold-backed exchange-traded funds saw combined outflows of nearly $1 billion on Tuesday, according to data compiled by Bloomberg \u2014 the biggest ever one-day decline and a sign of how investor confidence has been rattled. Last week, the same ETFs were notching record inflows.<\/p>\n
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Volatility in precious metals will remain elevated, according to Bank of America Corp. Gold has a stronger, longer-term investment thesis than silver, said Niklas Westermark, head of EMEA commodities trading at BofA. While inflated prices and market turmoil may affect position sizing, it won\u2019t dampen overall investor interest, he said.<\/p>\n
Many banks have backed gold to recover, with Deutsche Bank AG saying on Monday that it was standing by its forecast for bullion to rally to $6 000 an ounce. Goldman Sachs Group analysts Lina Thomas and Daan Struyven said in a note that they see \u201csignificant upside risk\u201d to their year-end forecast of $5,400.<\/p>\n
Read: Gold stocks sent into a tailspin<\/p>\n
Gold climbed 2.5% to $5 072.52 an ounce as of 12:40 p.m. in Singapore. Silver advanced 3.3% to $87.99. Platinum and palladium also rose. The Bloomberg Dollar Spot Index, a gauge of the US currency, was little changed after ending the previous session down 0.3%.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
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