FILE PHOTO: People look at gold jewellery as they stand outside a jewellery shop at the Grand Bazaar in Istanbul, Turkey, January 26, 2026. REUTERS/Kemal Aslan/File Photo
Gold prices bounced back to near $5,100 on Wednesday on safe-haven demand as renewed geopolitical tensions between the U.S. and Iran added to the yellow metal's appeal a day after it posted its best day in over 17 years.
Spot gold shot up 2.8% to $5,076.01 per ounce as of 0655 GMT, after surging 5.9% on Tuesday, its biggest daily gain since November 2008. Bullion scaled a record high of $5,594.82 last Thursday.
U.S. gold futures for April delivery climbed 3.3% to $5,097.20 per ounce.
The U.S. military on Tuesday shot down an Iranian drone that "aggressively" approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the U.S. military said.
Gold is bouncing back from a low of $4,403.24 touched on Monday after its biggest two-day sell off in decades.
"After such a sharp rally, a correction was expected, it was not surprising and with gold coming back up, the fundamentals have not changed much," ANZ analyst Soni Kumari said, adding that the geopolitical and economic backdrop remained mostly unchanged.
Goldman Sachs on Wednesday said that it saw significant upside risk to its $5,400 year-end forecast for gold on central banks maintaining their recent pace of accumulation alongside private investors stepping up gold ETF purchases.
"Going ahead ... we are expecting the same $5,600 levels (for gold) by the end of the first half or April-end while prices will continue to rise thereafter and our year-end target is $6,000/oz," said Jigar Trivedi, a senior research analyst at IndusInd Securities.
Spot silver rose 5% to $89.38 an ounce. It touched a record high of $121.64 on Thursday but fell to a month-low at $71.33 on Monday having registered a record single-session price wipe-out of 27% on Friday.
Markets now await ADP private payroll data for more cues on the Federal Reserve's policy path even as a partial U.S. government shutdown has delayed the closely watched employment report for January.
Spot platinum added 4.2% to $2,302.56 per ounce, while palladium gained 3.5% to $1,794.15. - Reuters
