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Gold rebounded yesterday and was set for a weekly gain, helped by bargain hunting, a slightly weaker dollar and lingering concerns over US-Iran talks in Oman, while silver recovered from a 1-1/2-month low.
Spot gold rose 3.1 per cent to $4,916.98 per ounce by 9.31am ET (1431 GMT), recouping losses posted during a volatile Asia session that followed a fall of 3.9pc on Thursday. Bullion was headed for a weekly gain of about 1.3pc. US gold futures for April delivery gained 1pc to $4,939.70 per ounce.
The US dollar index fell 0.3pc, making greenback-priced bullion cheaper for the overseas buyers.
“The gold market is seeing perceived bargain hunting from bullish traders,” said Jim Wyckoff, senior analyst at Kitco Metals.
Iran and the US started high-stakes negotiations via Omani mediation yesterday to try to overcome sharp differences over Tehran’s nuclear programme.
Wyckoff said gold’s rebound lacks momentum and the metal is unlikely to break records without a major geopolitical trigger. Gold, a traditional safe haven, does well in times of geopolitical and economic uncertainty.
Spot silver rose 5.3pc to $74.98 an ounce after dipping below $65 earlier, but was still headed for its biggest weekly drop since 2011, down over 10.6pc, following steep losses last week as well.
“What we’re seeing in silver is huge speculation on the long side,” said Wyckoff, adding that after years in a boom cycle, gold and silver now appear to be entering a typical commodity bust phase.
CME Group raised margin requirements for gold and silver futures for a third time in two weeks on Thursday to curb risks from heightened market volatility.
Spot platinum added 3.2pc to $2,052 per ounce.
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