Gold and Silver Rally as Global Stocks Suffer; CME Tackles Risk with Higher Margins

Gold prices rose by 2.3 per cent to $4,879.45 per ounce at 05:52am GMT (10:52am PST), marking a gain of 0.3 per cent for the week. US gold futures for April delivery also increased by 0.2 per cent, reaching $4,897.20 per ounce.

Silver prices faced volatility with an upward swing of 3.8 per cent on Friday. The metal rallied after having fallen about 10 per cent in early Asia trade to levels below the $65-per-ounce mark—its lowest point in over a month. Over the past week, silver lost more than 13 per cent, its biggest weekly decline since 2011.

The sole China silver futures fund experienced significant declines, shedding by its ten percent daily limit for the sixth consecutive session on Friday. This trend has pushed the metal down sharply to below $65 per ounce.

Head of global macro at Tastylive, Ilya Spivak, noted: “There is ample evidence indicating weakening risk sentiment. In such an environment, gold is holding steady while silver seems to be crumbling under heightened volatility.”

Global equities continued their losses for a third day as Wall Street’s selloff intensified. Precious metals and cryptocurrencies were experiencing significant swings in price.

ANZ analyst Soni Kumari suggested that the correction in gold and silver prices may have coincided with Chinese New Year, potentially leading to increased buying by Chinese consumers who seek items like jewelry during this festive period. However, she acknowledged that volatility could continue until positions are unwound due to weakened market sentiment.

CME Group announced a hike in margin requirements for gold and silver contracts on Thursday as the world’s largest commodities exchange aimed to mitigate risks associated with heightened volatility.

Spot platinum gained 0.4 per cent to $1,993.95 per ounce, following its all-time high of $2,918.80 on January 26. Palladium increased by 2.2 per cent to $1,651.74, although both metals saw declines for the week.