Gold prices surged in global trading as the metal rebounded sharply from a violent selloff, refocusing investor attention on precious metals amid unsettled equity markets and rapidly shifting risk sentiment.
Spot gold climbed 5.5 per cent to US$4,921.42 an ounce, while U.S. gold futures for April delivery rose 6.3 per cent to $4,945.60. The rebound followed several days of erratic trading in which gold temporarily abandoned its traditional role as a safe haven and moved more in line with risk assets, according to market observers.
In early trading at 8 a.m. ET, gold was priced at about $6,739 CAD per ounce, while silver traded near $112.50. The volatility followed a dramatic increases last week when gold surged to roughly $7,670 before plunging on Jan. 30 in a rapid selloff that erased as much as eight per cent in minutes, driving prices to a low near $6,661. Silver suffered even steeper losses, falling from a recent peak near $156 on Jan. 28 to about $115 by the close, wiping out a significant portion of its recent gains in a matter of hours.
“Traditionally, gold acts as protection against market risk, but it is now behaving like a risky asset,” said Ipek Ozkardeskaya, senior analyst at Swissquote. She attributed the extreme price swings to highly speculative and leveraged positioning, noting that the resulting volatility poses challenges for diversified portfolios, many of which maintain exposure to gold.
Bullion remained a focal point for collectors and dealers at the Paris Coin Show on Feb. 1, with dealers reporting strong buying and selling activity.
The rebound in gold came as global equities edged higher after a three-day decline, with investors responding to improving trade sentiment following a reported U.S.–India trade deal.