Gold Rebounds After Two-Day Rally "Broken"
Gold rose again and pared some losses, after a previous major rally abruptly broke down and sent prices plummeting. Silver also strengthened, indicating the market is beginning to calm down after the last few turbulent sessions.
In recent trading, spot gold rose by around 2.9% to approach $4,800/ounce, while silver surged by around 5% and briefly broke through $83. This rebound comes after gold fell nearly 5% in the previous session and recorded sharp declines in the past two days.
Previously, the precious metal had soared to a record high last month as investors sought safe havens: geopolitical concerns, the issue of "currency debasement," and concerns about central bank independence fueled the rally. However, the overly rapid rally also left the market overcrowded, so when the US dollar strengthened, profit-taking and position liquidations exacerbated the correction.
One key to the next direction will be whether Chinese investors choose to "buy the dip." Reports indicate a rush of buyers visiting Shenzhen's largest gold exchange to purchase jewelry and bullion ahead of the Lunar New Year holiday. China's domestic market will also be closed for more than a week starting February 16th.
In terms of bank projections, some remain optimistic. Deutsche Bank AG, for example, maintains its view that gold has the potential to reach $6,000/ounce by 2026. JP Morgan also projects gold could rise to $6,300/ounce by the end of 2026, citing strong investor and central bank demand despite increased volatility.
Meanwhile, the US dollar weakened slightly after a brief period of strengthening, which typically provides a breather for USD-denominated commodities. In Asia, gold prices were reported at around $4,778/ounce on Singapore morning, while silver was around $82–83—with platinum and palladium also rising.
Essentially, this move is more like a "position cleanup" than a complete change in the fundamental story. The next direction is likely to be determined by three factors: the strength of the dollar, the decision of market participants (especially Chinese) to buy on dips, and whether volatility subsides ahead of the Lunar New Year holiday.
5 key points:
- Gold rebounded to near $4,800/ounce, while silver briefly broke through $83.
- Previously, prices fell sharply due to a reversal of the overcrowded rally and position liquidation.
- Chinese demand (buy the dip) will determine the next direction; Chinese markets are closed starting February 16.
- Major banks remain bullish: Deutsche Bank at $6,000, JP Morgan at $6,300 (end of 2026).
- A weakening dollar has slightly helped the precious metal's recovery, but volatility remains high. (asd)
Source: Newsmaker.id
