Gold and Silver Prices Stage Strong Rebound After Exceptionally Volatile Trading Week
Both gold and silver prices experienced a sharp and significant rebound on Monday, February 9, following an exceptionally volatile trading week that saw substantial price swings. This recovery marks a notable shift in momentum for the precious metals market.
Current Price Movements and Historical Context
Spot gold prices advanced by nearly 1.18% to reach $5,040 per ounce during Asian trading hours on Monday. Simultaneously, spot silver prices surged as much as 3.39% to $79.89 per ounce. Despite these gains, it is important to note that gold prices remain 11.27% below their record high of $5,608.35, while silver prices are still 52.29% below the all-time high of $121.67 reached on January 29.
Key Drivers Behind Today's Rally
The rally in precious metals was primarily fueled by the decisive election victory of Japan's incumbent Prime Minister Sanae Takaichi. According to a Bloomberg report, this political outcome has strengthened market expectations for more accommodative fiscal policies and continued pressure on the Japanese yen. Both factors are traditionally supportive of gold prices as they create favorable conditions for precious metal investments.
Market participants are also closely monitoring key US economic indicators scheduled for release this week, which are expected to provide clearer signals regarding the Federal Reserve's monetary policy stance. The January employment report, due on Wednesday, is anticipated to indicate a stabilizing labor market, while inflation figures are slated for release on Friday. These data points will significantly influence market sentiment and direction.
Last week witnessed a heavy pullback in both precious metals, driven by several factors including profit-taking activities, a firmer US dollar, and higher real yields that made alternative investments more attractive relative to non-yielding assets like gold and silver.
Expert Analysis and Price Outlook
According to Ponmudi R, CEO of Enrich Money, the longer-term outlook for precious metals remains constructive and positive. This optimism is supported by several fundamental factors including continued central bank purchases, limited mine supply, robust industrial demand—particularly for silver—and persistent geopolitical factors alongside ongoing currency diversification efforts by various market participants.
Ponmudi further elaborated that precious metals are currently attempting to stabilize following last week's sharp sell-off. Importantly, he emphasized that the medium- to long-term bullish structure remains firmly intact. The recent correction has actually helped unwind excess leverage that had built up during January's substantial rally, potentially creating a healthier foundation for future price movements.
Detailed Gold Price Analysis
Regarding the specific outlook for gold prices, Ponmudi stated, "COMEX gold is consolidating above the $4,800–$4,900 region after retreating from record highs. The multi-year rising channel remains intact, with the former breakout zone near $4,500–$4,600 acting as strong structural support. As long as $4,800 holds, the current phase is viewed as a corrective pause. Renewed safe-haven demand or easing dollar strength could reopen the path toward $5,200 and beyond."
Detailed Silver Price Analysis
Meanwhile, on the silver prices outlook, Ponmudi added that silver remains volatile after correcting from highs above $120 but is stabilizing within the $71–$80 demand zone. He explained, "A hammer formation near $64 aligns with the long-term 100-day EMA, reinforcing structural support. Silver's dual monetary and industrial role continues to support a constructive outlook. A decisive move above $80–$85 would significantly strengthen recovery prospects toward $100–$105."
Alternative Market Perspective
On the other hand, Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, offers a slightly different perspective. He believes that major US data releases this week have kept market sentiment slightly cautious, though prices continue to find strong support near $4,800 on CME. Trivedi added, "Immediate resistance is now seen near $4,925 and ₹1,55,000, with volatility likely to persist around key data triggers."
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
