Gold and Silver Prices Rebound After Historic Sell-Off

Gold and silver prices are rising again after a big drop. On Tuesday, gold was up about 5.5% to $4,921.29 per standard precious metal weight unit. Silver rose over 9% to settle at around $86.70 per standard precious metal weight unit.

This rebound happened after gold fell nearly 10% on Friday and silver had its worst one-day performance since 1980, dropping 30%.

What Happened to Gold and Silver Prices

Gold and silver prices went down a lot on Monday. This drop made global stocks and funds linked to these metals go down too. But on Tuesday, they started to rise again.

Gold was last up about 5.5% to $4,921.29 per standard precious metal weight unit. Silver rose over 9% to settle at around $86.70 per standard precious metal weight unit.

How Mining Stocks Were Affected

Mining stocks and exchange-traded funds listed across the globe also went up as the metals continued to rise on Tuesday. In Europe, the regional Stoxx 600 Basic Resources index jumped more than 2% on Tuesday morning.

London-listed mining giants like Rio Tinto, Anglo American, and Fresnillo went up in early trade on Tuesday. Fresnillo, the world's leading silver producer, was last seen trading 4.6% higher.

What Happened in US Markets

In US markets, the ProShares Ultra Silver ETF was last seen trading 16.1% higher ahead of the opening bell. The abrdn Physical Silver Shares ETF gained around 8.5%. The iShares Silver Trust, which has been at the center of a retail investment frenzy, gained 8.6% by 4:30 a.m. on Tuesday morning.

How Gold and Silver Miners Were Affected

Shares of US-listed gold and silver miners were also significantly higher. Endeavour Silver jumped 9.2% in pre-market trading, while Coeur Mining added 9.4%. Hecla Mining and First Majestic Silver were both up more than 8%.

Will the Gold and Silver Rally Continue

The rebound came as investors reassessed whether the drop signaled a structural turning point or an exaggerated reaction to short-term catalysts. Strategists at Deutsche Bank said history suggests it is short-term catalysts, even as the scale of the sell-off has raised fresh questions about market positioning.

The bank said that while signs of elevated speculative activity have been building for months, they are insufficient on their own to explain the magnitude of last week's move. The adjustment in precious metal prices overshot the significance of its ostensible catalysts.

Looking to the Future

The sell-off was triggered by a combination of factors, including a rebound in the US dollar and shifts in expectations around Federal Reserve leadership. But Deutsche Bank said the broader investment case for gold and silver remains intact. Gold's thematic drivers remain positive and investors' rationale for gold allocations will not have changed.

The conditions do not appear primed for a sustained reversal in gold prices. Barclays struck a similar tone, acknowledging overheated technicals and stretched positioning, but said that the broader bid for gold can remain resilient amid geopolitical and policy uncertainties and reserve-diversification themes.