At approximately 8:12 AM Vietnam time, spot gold prices rose 2.1% to $5,048.55 per ounce. Prior to this, the metal had gained more than 6% in the previous trading session due to a return of risk appetite and a weakening US dollar. Silver also rose 2.1% to $86.90 per ounce. Platinum and palladium also increased. Year-to-date, gold has gained nearly 15%. Last week, gold prices surpassed the $5,000 per ounce mark for the first time.
Daniel Ghali, senior commodity strategist at TD Securities, believes the sell-off in precious metals has likely ended. However, he also warned that the volatile trading over the past week could lead retail investors to choose to stay on the sidelines.
Meanwhile, many major banks still place their faith in the recovery of gold. Deutsche Bank AG said on February 2nd that it remains steadfast in its forecast that the price of gold will reach $6,000 per ounce.
Last month, the price of the precious metal surged due to speculation, geopolitical instability, and concerns surrounding the independence of the US Federal Reserve (Fed). Chinese investment funds and Western retail investors have heavily invested in gold, coupled with a wave of money flowing into leveraged trading products and call options.
However, this "too fast, too strong" rally collapsed abruptly at the end of last week. The market witnessed the largest single-day drop in silver's history, while gold experienced its worst plunge since 2013. The sell-off began in Asian trading on January 30th and continued into the beginning of this week before a recovery occurred.