Gold and Asian Stocks Rebound as Market Volatility Eases and Global Sentiment Improves

Gold prices and Asian stock markets rebounded on Tuesday as global financial markets steadied following sharp volatility in metals trading, while investor sentiment was supported by a strong rebound in U.S. factory activity. The calmer tone helped risk assets recover after heavy losses driven by forced liquidations and leveraged trades unwinding across commodities and equities.

Japan’s Nikkei surged 2.5%, erasing most of Monday’s declines, while South Korea’s KOSPI jumped 4%. Hong Kong stock futures also pointed higher, reflecting improving regional sentiment. U.S. equity futures showed modest gains, with S&P 500 futures up 0.3% as investors prepared for a busy earnings week featuring major technology and semiconductor companies.

Australian markets were in focus ahead of the Reserve Bank of Australia’s policy decision. Strong labor market data and hotter-than-expected fourth-quarter inflation have increased expectations of a 25 basis point interest rate hike. Australian shares rose 1.3% in early trade, while the Australian dollar held firm near $0.6958 after posting its strongest monthly gain in three years during January.

Gold prices climbed more than 3% in Asian trading to around $4,800 per ounce, rebounding nearly 9% from Monday’s lows. Silver prices also jumped 5% to approximately $83.34 an ounce. Precious metals had sold off sharply following U.S. President Donald Trump’s nomination of Kevin Warsh as Federal Reserve chair, a move seen as bearish for gold due to expectations of balance sheet reduction and higher bond yields. However, market participants noted the sell-off went beyond fundamentals, triggering a broad liquidation of leveraged positions.

On Wall Street, U.S. manufacturing activity expanded for the first time in a year, according to PMI data, lending support to equities and Treasury yields. The benchmark 10-year yield steadied near 4.275%, while the two-year yield held around 3.57%. Technology stocks led gains, pushing the S&P 500 higher, with Alphabet reaching a record high ahead of earnings. Disney shares fell sharply after warning of weaker earnings and declining international tourism.

Currency markets stabilized after recent dollar volatility. The euro traded near $1.18, the yen hovered around 155.54 per dollar, and the rupee was supported by news of a U.S.-India trade deal. Meanwhile, Brent crude oil fell 6% to $66.30 per barrel amid easing U.S.-Iran tensions, adding another layer to shifting global market dynamics.