Gold and silver prices staged a powerful rebound on Tuesday, clawing back a significant portion of last week’s historic losses as investors rushed to buy the dip and volatility began to cool.
Spot gold surged 6.2% to around $4,930 an ounce, marking a $277 intraday swing. The move followed one of the most aggressive sell-offs in decades, when bullion collapsed from a record high near $5,595 just days earlier.
Silver led the charge across the precious metals complex. Prices soared 11.4% to trade above $87 an ounce, erasing much of what traders had described as a “historic rout.”
A Violent Reversal After Forced Liquidation
The scale of last week’s decline was extraordinary. Gold recorded its steepest one-day percentage drop since the early 1980s, while silver posted its largest daily fall on record.
The sell-off accelerated during Asian trading hours, when thin liquidity amplified losses. Margin calls and forced liquidations added fuel to the downside, pushing prices sharply lower in a matter of hours.
By Tuesday morning, however, the selling pressure had largely evaporated.
Dollar Weakness and Technical Buying Support Metals
Strategists pointed to a combination of macro and technical factors behind the rebound. The U.S. dollar weakened modestly, easing pressure on dollar-priced commodities. At the same time, equity markets stabilized, with the S&P 500 hovering near record levels and encouraging a more constructive risk backdrop.
Many investors also viewed last week’s plunge as overdone after months of rapid gains.
“This was a classic vacuum of sellers,” one market participant said, noting that once forced liquidation ended, prices snapped higher on relatively thin offers.
Liquidity Floods Back Into the Market
Trading volumes underscored the intensity of the move. Nearly $101 billion in gold futures changed hands, alongside roughly $43 billion in silver trades, highlighting the extreme liquidity currently moving through the system.
Elsewhere in the metals space, platinum advanced toward $2,230 an ounce, while copper rebounded above $6 per pound.
Reversal or Dead Cat Bounce?
Despite the dramatic rebound, questions remain about sustainability. Major banks, including Deutsche Bank, continue to flag $6,000 gold as a medium-term baseline, but warn that ongoing deleveraging could keep volatility elevated.
For now, market participants are watching closely to see whether the nearly 6% daily bounce marks a true trend reversal—or simply a “dead cat bounce” following one of the most violent sell-offs in years.
