Gold gained 1 percent on Monday and silver surged 5 percent, bouncing up on bargain hunting after last week's sharp sell-offs and boosted by a ratings downgrade of Greece and a broad commodities rally. Gold and silver rose sharply for a second session, but some said gains were unlikely to last.
Silver, hit by a succession of margin hikes that nearly doubled costs, had its biggest correction last week since prices collapsed in 1980. Spot gold rose 0.9 percent to $1,508.09 an ounce by 12:45 pm EDT (1645 GMT), having earlier risen as high as $1,511.10. Spot silver was up 5.1 percent at $37.42 an ounce. Gold and silver got a boost when ratings agency Standard & Poor's downgraded Greece's credit rating, shining a spotlight on worries over smaller eurozone economies.
The dollar rose against the euro on Monday for a fourth straight day after the downgrade kept peripheral eurozone debt woes in focus and made investors risk averse. From a technical perspective, silver looks more vulnerable than gold after last week's rout, analysts said.