Quick overview

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Gold rebounded above $4,900 an ounce as dip-buyers seized the metal following a two-day decline. Wednesday’s thin trading saw a 2.7 percent increase in gold, while the Lunar New Year holiday kept much of Asia offline. The metal had lost over 3 percent over the preceding two sessions.

 

Investors “can reasonably expect a soft patch” in precious metals over the holiday season, according to a note from BMO Capital Markets analysts, creating an opportunity for bargain pricing.

January was an extraordinary month for gold, with prices rising to consecutive peaks and hitting $5,500 an ounce for the first time.

that fierce run came to an abrupt stop was the day that bullion fell the most in more than ten years in January. According to Ewa Manthey, a commodity strategist at ING Bank, the historic decline has reset the volatility, and gold has been trading in a wider range for the past few weeks.

Numerous financial institutions, such as Goldman Sachs, Deutsche Bank AG, and BNP Paribas SA, predict that the factors that supported gold’s previous steady rise will remain in place and that prices will start to rise again.

These include worries about the independence of the Federal Reserve and increased geopolitical tensions. Investors will be watching Fed officials’ remarks for hints about US monetary policy in the near future. Non-yielding precious metals would benefit from an appetite for rate cuts; gold briefly increased on Friday as the argument for lower borrowing costs was strengthened by modest inflation data.