After a sharp fall in the previous session, the gold market rebounded on Friday, with the spot gold price regaining the $1800 / oz mark, up more than $10.
Overnight spot gold hit a low of $1784 an ounce, a two-month low. After this week's wild swings, this is likely to be the second week in a row that the gold market fell, falling more than 2%, the worst week in nearly a month.
The silver market fell sharply this week after setting an eight-year high, the worst week in three weeks.
Margaret Yang, a strategist at DailyFX, said investors saw a technical rebound after Thursday's plunge, but the recent general trend in gold was bearish because of higher dollar and bond yields.
The dollar index had its best performance in three weeks this week, and US bond yields also rose.
Yang points out that the economic outlook is getting better against the backdrop of vaccine distribution, which is clearly bad for safe-haven asset gold.
"the macro data are also improving, which will affect the safe-haven demand of gold."
Jeffrey Halley, a senior market analyst at Oanda, said the gold market will experience difficulties in the short term. However, after the economic recovery accelerates in the second quarter, gold's inflation hedge function will become more prominent.
"the fate of silver is similar to that of gold, which may test a low of $22 an ounce in the next two weeks, but Biden's environmental policies will support silver."
