Gold Recovers From Two-Week Low as Thin Trading Drives Volatility

Credit: Reuters

Spot gold was up 0.7% at $4,361.71 per ounce, as of 0709 GMT, after hitting a record high of $4,549.71 on Friday. It fell to its lowest since December 17 on Monday, marking its sharpest daily percentage loss since October 21.

U.S. gold futures for February delivery were up 0.8% at $4,377.20/oz.

"The fact that we've had such a significant selloff from Monday open ... it just goes to show the significant volatility probably compounded by thinner trading conditions because of the holiday season," Kyle Rodda, senior analyst at Capital.com, said.

The relative strength indexes (RSI) for both gold and silver fell from 'overbought' territory on Monday.

Bullion has staged a stellar run in 2025, climbing 66% so far.

Interest rate cuts and bets of further U.S. policy easing, geopolitical conflicts, robust demand from central banks, and rising holdings in exchange-traded funds have fueled gold's rally this year.

Traders expect at least two U.S. rate cuts next year. Non-yielding assets tend to do well in a low interest rate environment.

Spot silver was up 3.1% at $74.49 per ounce, after hitting an all-time high of $83.62 in the previous session. Silver logged its biggest daily loss since August 11, 2020, on Monday.

The metal has gained 158% year-to-date, far outpacing gold, propelled by its designation on the critical U.S. minerals list, supply constraints, and low inventories amid rising industrial and investment demand.

"I'm expecting the longer-term rally to continue for both gold and silver, with price targets in the next six months at $5,010/oz for gold and $90.90 for silver," said Kelvin Wong, senior market analyst at OANDA.

Spot platinum rose 1.8% to $2,146.81 per ounce. On Monday, it logged its biggest one-day drop ever after touching an all-time high of $2,478.50.

Palladium lost 0.7% to $1,605.72 per ounce, after its value dropped by 16% on Monday.

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