Gold rebounds on march to best year since 1979

Prices of gold and other precious metals rebounded from the previous session's sharp selloff on Tuesday as the focus returned to persistent global risks that have propelled bullion to its strongest annual performance in more than four decades, reports Reuters.

Spot gold was up 1.6% at $4,398.94 an ounce by 1311 GMT. On Monday it posted its biggest daily percentage loss in more than two months in a retreat from Friday's record high of $4,549.71, which analysts blamed on profit taking. US gold futures were up 1.7% at $4,415.50.

"The selloff yesterday had the hallmarks of profit taking and repositioning ahead of the new year ... buyers are likely returning as the structural conditions of this rally - a weaker US dollar and ongoing geopolitical uncertainty - still remain," said Zain Vawda, analyst at MarketPulse by OANDA.

Bullion has climbed by 66% this year for its biggest annual gain since 1979, fuelled by monetary easing, geopolitical tensions, central bank buying and rising holdings in exchange-traded funds.

On the geopolitical front, Russia accused Ukraine of trying to attack President Vladimir Putin's residence and vowed retaliation, denting prospects of a peace deal.

Silver rose 5.7% to $76.34 an ounce. It hit a record high of $83.62 on Monday before logging its biggest daily drop since August 2020, with analysts at Societe Generale also pointing to a move on Friday by the CME group to raise its initial margin requirement for silver futures.

CME Group raised the security deposit traders are required to maintain with the exchange for COMEX silver futures by 13.6% to $25,000 per contract, up from $22,000.

Silver has surged by 159% this year, driven by its inclusion on the US critical minerals list, supply deficits and growing industrial and investor appetite.