Gold and silver rebounded more than 2% from near one-month lows on Tuesday as traders assessed fair value following a sharp selloff triggered by the nomination of Kevin Warsh as Federal Reserve chair and higher margin requirements at CME Group.
What Happened: Precious Metals Recover
Spot gold climbed 2.2% to $4,767.33 per ounce by 0318 GMT after touching a near one-month low on Monday. The metal had reached a record high of $5,594.82 on Thursday.
U.S. gold futures for April delivery rose 3% to $4,791.10 per ounce. Silver gained 2.8% to $81.61 an ounce after hitting its own record of $121.64 last week.
CME Group raised margin requirements on precious metal futures after Monday's market close. The U.S. Bureau of Labor Statistics announced the January employment report would not be released Friday due to a partial government shutdown.
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Why It Matters: Fair Value Assessment
Kyle Rodda, senior market analyst at Capital.com, said the selloff brought prices back to reasonable levels. "It's a reasonable call that this is somewhere around fair value potentially, if you consider that we saw a market behaving fairly irrationally for a few weeks there," Rodda said.
Current prices return gold and silver to where they traded early in the second half of January. Gold rose nearly 13% in January in its biggest monthly gain since November 2009, while silver jumped 19%.
Rodda noted markets endorsed Warsh's nomination by President Donald Trump as relatively credible, strengthening the dollar and pressuring precious metals. Investors expect at least two Federal Reserve rate cuts in 2026, which typically benefits non-yielding bullion.