Gold Prices Rise Again After a Tough Week for Investors

SadaNews - Gold prices rose as buyers looking to capitalize on dips returned to the market after an exceptional week of sharp volatility in precious metals.

Gold traded up and down around the $5,000 per ounce mark, trying to find solid ground after a historic selling wave at the end of last month.

The metal rose by as much as 1.7% on Monday, recovering nearly half of its losses since dropping from the all-time high it reached on January 29. Silver prices also increased.

Ahmad Assiri, an analyst at Pepperstone Group Ltd, stated, "Gold's ability to stabilize above the $5,000 threshold will be critical in determining whether the market can transition from a reactive rebound to a more sustainable rise."

A Historic Drop Following a Record High

The precious metals experienced a collapse in late January following a record and rapid rise driven by increasing geopolitical risks, currency devaluation trades, and concerns over the Federal Reserve's independence.

A wave of speculative buying contributed to this rise. U.S. Treasury Secretary Scott Piesent pointed to Chinese traders as one of the reasons for the sharp volatility in gold last week.

Despite a week of volatile trading since the historic drop, banks including Deutsche Bank and Goldman Sachs supported forecasts for a recovery in gold, based on long-term demand drivers.

Data during the weekend showed that the People's Bank of China continued to purchase gold for the fifteenth consecutive month, confirming the strength of official demand, a key component of growth over the past two years.

More Violent Volatility in Silver and Anticipation of U.S. Data

The movements in the silver market were more violent than in gold, amplified by speculative momentum and weak liquidity in over-the-counter trading. The white metal, which has lost more than a third of its value since reaching an all-time high, rose by as much as 5% on Monday, surpassing $80 per ounce.

Regarding upcoming expectations, traders are awaiting economic data from the U.S. for a clearer picture of the Federal Reserve's policy direction. The January jobs report, due out on Wednesday, is expected to show signs of stability in the labor market, while inflation data is set to be released on Friday.

U.S. President Donald Trump's nominee to lead the Federal Reserve, Kevin Warsh, expressed support for a new agreement between the U.S. central bank and the Treasury Department, heightening longstanding concerns about the Federal Reserve's independence.

Gold rose by 0.6% to $4,995.76 per ounce by 10:20 AM in Singapore. Silver increased by 3.8% to $80.76.

Platinum prices fell, while palladium recorded a slight increase. The Bloomberg dollar index, a measure of the strength of the U.S. currency, remained nearly stable after ending the previous session down 0.4%.