Gold and silver prices rose sharply Tuesday, with bullion set for its biggest daily rise since November 2008, as investors snapped up the metals following their steepest two-day slump in decades.

Spot gold climbed 5.3% to $4,913.59 an ounce by 1234 GMT.

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It is bouncing back from a low of $4,403.24 on Monday, while the $5,594.82 per ounce mark touched last week remains a historic peak for now.

U.S. gold futures for April delivery rose 6.1% to $4,936.20 per ounce.

Silver surged 9% to $86.60 an ounce on Tuesday, after posting a record 27% one-day drop on Friday and falling a further 6% on Monday.

"The market was oversold after the announcement of U.S. President Donald Trump to nominate Kevin Warsh as the next Federal Reserve chairman. What we see today is a rebound," said Quantitative Commodity Research analyst Peter Fertig.

"You also see investors who have sold on profit taking are now regarding the prices as attractive again for buying."

While investors expect Warsh to favor rate cuts, they anticipate he will tighten the Fed's balance sheet, a move typically supportive of the dollar.

Meanwhile, CME Group also raised margin requirements on precious metal futures, further weighing on prices. However, analysts see the yellow metal's bull run continuing and expect it to notch fresh record highs later this year.

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"Gold has now cleared its first retracement hurdle at $4,858, shifting focus toward $5,000 — the 50% retracement of the latest slump. For silver, the equivalent levels sit higher at $90.58 and $96.52," said Ole Hansen, head of commodity strategy at Saxo Bank.

Meanwhile, the U.S. Bureau of Labor Statistics said on Monday the closely watched employment report for January would not be released this Friday due to a partial shutdown of the federal government.

In other metals, spot platinum climbed 5.4% to $2,235 per ounce after hitting a record high of $2,918.80 on January 26, while palladium was up 4.8% at $1,801.50.