Gold – Gold and silver exchange-traded funds staged a sharp recovery on Tuesday, snapping a three-session losing streak that had unsettled investors and triggered widespread caution across bullion-linked assets.
After enduring a heavy selloff that erased significant value late last week, gold and silver ETFs climbed by as much as 13%, reflecting renewed buying interest as prices stabilised. The rebound followed a period of intense pressure that marked the steepest weekly decline in several months for both metals. Futures contracts on the Multi Commodity Exchange mirrored the recovery, posting solid gains after last week’s abrupt fall.
Market participants attributed much of Tuesday’s upswing to bargain hunting. Investors who had remained on the sidelines during the selloff stepped in as valuations turned more attractive. The sharp decline had pushed both gold and silver into technically oversold territory, prompting buyers to view the downturn as excessive rather than fundamental.
The selling wave that dominated the latter part of last week also began to ease, allowing sentiment to stabilise. With panic-driven exits slowing, short-term traders and long-term investors alike found room to re-enter positions at lower levels.
Hareesh V, Head of Commodity Research at Geojit Investments Limited, cautioned against interpreting the rebound as the start of a new rally. According to him, the move reflects early signs of price stability rather than a confirmed reversal of the broader trend.
He explained that investors are reassessing whether last week’s slide represented a structural change or simply an overshoot driven by short-term factors. In his assessment, the underlying fundamentals supporting bullion prices remain largely intact.
Hareesh noted that recent price adjustments are a response to multiple near-term developments. These include higher margin requirements, a firmer US dollar, and repositioning linked to expectations around the Federal Reserve chair nomination. None of these, he said, point to a weakening of long-term demand for precious metals.
Looking ahead, he expects price action to remain uneven in the near term. A more sustainable recovery, if it materialises, is likely to unfold gradually. He also highlighted that further selling pressure could emerge only if prices fall below last week’s lows, which currently serve as important support levels.
International market cues also turned more favourable. The US dollar softened slightly after hovering near recent highs, easing pressure on bullion prices. Spot gold found support in overseas markets, helping domestic ETFs regain footing.
Silver, which had dropped more than 10% last week, attracted strong interest as traders took advantage of lower prices. Given silver’s dual role as both a precious and industrial metal, its movements tend to be sharper during periods of heightened volatility.
For ETF investors, the swift rebound served as a reminder of how quickly sentiment can shift in precious metals markets. While last week’s decline was abrupt, the recovery was equally rapid, reinforcing gold’s reputation as a preferred defensive asset during uncertain times.
Silver continues to display higher sensitivity to changes in industrial outlook and broader risk appetite. However, analysts note that it often delivers strong rebounds once market confidence begins to return.
Market watchers expect volatility to persist as global investors monitor currency movements, inflation trends, and geopolitical developments. Despite near-term fluctuations, the return of buying interest suggests that gold and silver remain central to portfolio hedging strategies.
The latest rebound has provided some relief after a turbulent stretch. Whether it develops into a sustained recovery will depend on the evolution of global cues and the market’s ability to hold above critical support levels established during last week’s selloff.
