Gold extends rally to surge the most since March; silver soars

Gold soared the most since March, helped by a continued decline in Treasury yields, as traders weighed concerns that central banks’ monetary tightening will lead to recession and the possibility that bond rates may have reached a peak.

Bullion extended its first weekly gain in three, as lower bond rates boosted the appeal of the non-interest bearing asset. Silver gained the most since February 2021 as traders bought back their previously short positions with the dollar and bond yields moving lower.

Investors remained jittery about the impact of aggressive interest-rate hikes after a slew of Federal Reserve officials last week re-emphasized their resolve to fight inflation. This is despite weak US manufacturing data signalling that the US central bank may not overtighten monetary policy. 

Traders will now look to US jobs data due on Friday for more clues on the future path of central bank monetary policy. That means bullion could be in for more volatility, with strong numbers potentially spurring further gains in bond yields that would be harmful for gold.