Markets Hit by Whiplash: Gold Rises Sharply, Volatility Remains Hot
Gold prices surged more than 6% on Tuesday (February 3), rebounding sharply after two days of the deepest correction in decades. This rebound occurred after gold briefly touched the $4.4K/ounce area on Monday, when the market was busy taking profits following the previous rally that took prices to a record high above $5,600/ounce.
Behind this volatility, sentiment was also influenced by Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chairman. The market viewed Warsh as being more "tight" than previously expected—not only on interest rates, but also on the potential for a more disciplined approach to the central bank's balance sheet—which initially boosted the dollar and pressured precious metals, before ultimately triggering an "oversold bounce" as positions were cleared out.
Uncertainty in US economic data also added to the mix. The Bureau of Labor Statistics delayed the release of the US payrolls report due to the partial shutdown, leaving the market without a key "compass" for reading the direction of interest rate policy in the near future.
On the geopolitical front, the market is still monitoring two major headlines: the United States-Iran nuclear talks scheduled for Friday in Istanbul, and the escalation of the Russia-Ukraine war ahead of the negotiations, following a major attack that disrupted Ukraine's energy infrastructure.
Latest price update: spot gold is around $4,923/ounce (last recorded at 9:33 a.m. ET / 9:33 p.m. WIB).
Source: Newsmaker.id
