Gold, Silver Bounce Back After Sharp Selloff

By Giulia Petroni

Gold and silver staged a rebound after two sessions of heavy selling that rippled across commodity markets, as underlying drivers of demand remain strong and current price levels draw renewed interest from buyers.

In midmorning European trading on Tuesday, New York gold futures rose 6.3% to $4,946.20 a troy ounce, while silver climbed 12.6% to $86.69 an ounce, recovering from last week's steepest one-day losses since 1980.

Precious metals have shattered records over the past year, supported by central-bank purchases and strong inflows into exchange-traded funds as investors moved away from sovereign bonds and currencies in favor of hard assets. Gold topped $5,500 an ounce last month, while silver rose above $120, boosted by a wave of buying from Chinese speculators.

The abrupt pullback was triggered by a rebound in the U.S. dollar, prompting widespread profit-taking after President Trump nominated Kevin Warsh as Federal Reserve chair, a candidate market viewed as more hawkish. CME Group, the leading operator of derivatives exchanges, also raised margin requirements for precious-metal futures, increasing the cost of holding positions.

"This correction will be healthy for the market in the long run," said Joni Teves from UBS. "This period should provide investors the opportunity to build long-term strategic positions at more attractive entry levels."

Gold's recent selloff hasn't shaken bullish calls from some major banks. JPMorgan raised its year-end estimates to $6,300 an ounce, driven by exceptionally strong demand from investors and central banks. Deutsche Bank maintained its $6,000-an-ounce forecast.

Near-term risks remain, as year-to-date gains have almost fully unwound and some investors might continue profit-taking. Still, market watchers say the pullback appears to be a correction rather than the start of a new downtrend, with volatility expected to remain elevated.

"Despite the sharp correction, gold's fundamental story remains unchanged," analysts at ING said. "The structural drivers-elevated geopolitical risk, macro uncertainty, diversification flows and ongoing central--bank buying-remain firmly in place."

Investors remain more cautious on silver. Elevated prices might damp industrial demand and encourage additional scrap supply, suggesting silver could lag behind gold in any renewed rally, some analysts said.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

February 03, 2026 05:34 ET (10:34 GMT)