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NEW YORK ( TheStreet ) -- Gold and silver prices recovered Monday after a painful selloff last week as bargain hunters stepped in. Gold for June delivery added $11.86 to settle at $1,503.20 at the Comex division of the New York Mercantile Exchange after falling 4.8% in a week. The gold price Monday has traded as high as $1,512 and as low as $1,489. The spot gold price was rising $13.10, according to Kitco's gold index. Silver prices rose $1.82 to close at $37.11 an ounce after plummeting 27% last week.
The consensus seems to be that silver has more downside now than gold. Barclays Capital thinks that silver will find support in the low $30s as "retail demand" takes the lead but that "longer-term investor interest in gold remains robust." Barclays cites Asian demand as a key factor for higher gold prices.
"I think that as we neared the expiration of the May contract of silver, we saw more aggressive buying in the silver versus the gold," says Brian Booth, senior market strategist at Lind-Waldock. "I think traders had $50 silver in mind for a target ahead of the May expiration." Booth thinks that gold could be headed for some margin hikes of its own despite the fact that the market is more liquid and historically less volatile than silver. Gold and silver breathed a sigh of relief Monday as the U.S. dollar index was volatile, currently falling slightly. The currency rallied more than 3% last week as the euro tanked on rumors that Greece might leave the European Union and on speculation that the European Central Bank won't raise rates at its July meeting, which had been widely expected. The lack of consistent and aggressive rate hikes will leave negative real interest rates in the EU for longer than anticipated, now at a negative 1.55%. Further helping gold and silver Monday was Standard & Poor's downgrade of long and short term Greek debt to B and C, respectively. Although a "default" might be off the table, more creative "defaults" like extending current bond maturity, meaning Greece can take longer to pay back debt, are being considered. All of which helps gold and silver as safe haven assets. However, it doesn't mean the recent correction in gold and silver is finished. James Moore, research analyst at FastMarkets, thinks that volatility could remain high with participants protecting themselves against more long selling. "While the corrections are likely to entice fresh demand from physical and investment sources, buyers may hold off until some price stability emerges with the metals still vulnerable to downside pressure," Moore said. Gold mining stocks were moving higher. Yamana Gold ( KGC) was adding 1.03% to $11.92 while Freeport McMoRan Copper & Gold ( FCX) was up 2.41% to $51.38. Other gold stocks, New Gold ( NGD) and Gold Fields ( GFI) were trading at $9.98 and $16.05, respectively.
-- Written by Alix Steel in New York. >To contact the writer of this article, click here: Alix Steel. >To follow the writer on Twitter, go to http://twitter.com/adsteel.