Gold prices rebound on Wednesday

Gold prices rebounded on Wednesday, hovering near $5,100 an ounce as safe-haven demand strengthened amid renewed US-Iran tensions, a day after bullion logged its strongest daily gain in more than 17 years.

Spot gold climbed 2.9 per cent to $5,082.94 an ounce by 0813 GMT, extending a near 6 per cent surge on Tuesday, its biggest single day rise since November 2008. US gold futures for April delivery advanced 3.4 per cent to $5,103.50. The metal recovered from a low of $4,403.24 hit on Monday after its sharpest two-day sell-off in decades, having reached a record high of $5,594.82 last Thursday.

Geopolitical concerns lifted sentiment after the US military said it shot down an Iranian drone that approached the Abraham Lincoln aircraft carrier in the Arabian Sea. Analysts said the recent pullback followed a rapid rally and did not alter the broader outlook, with geopolitical and economic fundamentals largely unchanged.

Goldman Sachs flagged upside risks to its $5,400 year end forecast, citing continued central bank buying and stronger gold ETF inflows. IndusInd Securities said prices could reach $5,600 by late April or early in the second quarter, with a potential rise towards $6,000 an ounce by the end of the year.

Other precious metals also rose sharply. Spot silver jumped 6.1 per cent to $90.34 an ounce, after swinging wildly in recent sessions following last week’s record high of $121.64 and a steep sell-off. Platinum gained 5.6 per cent to $2,334.25, while palladium added 5.4 per cent to $1,826.21.

Markets now await US ADP private payrolls data for signals on the Federal Reserve’s policy path, as a partial government shutdown continues to delay key employment figures.

Attribution: Reuters