Gold roared back on Tuesday, climbing more than 3% to trade above $4,820 an ounce, as savvy investors seized the chance to buy after two days of sharp losses.
The precious metal had tumbled nearly 5% on Monday, extending Friday’s plunge, the steepest drop it has seen in more than a decade.
Investors were initially spooked by President Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair. Warsh is widely seen as more hawkish than other contenders, fueling fears of tighter monetary policy and higher interest rates.
Meanwhile, easing tensions on the trade front provided some relief. Trump reduced tariffs on Indian goods to 18% after Prime Minister Narendra Modi agreed to end purchases of Russian oil, resolving months of trade friction.
Further, high-level US-Iran talks are scheduled for Friday, aiming to de-escalate long-standing geopolitical tensions in the region.
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Despite the rebound, uncertainty remains in the markets as key US labor data, including the closely watched non-farm payrolls report, will not be released this week due to the ongoing partial government shutdown.
Analysts say gold’s movements in the near term will largely depend on the interplay between global political developments and US economic indicators.
