Nothing says "oversold" quite like a 6% surge in gold futures that pulls prices back above $4,900 per ounce. That's exactly what happened in early Tuesday trading as bargain hunters jumped into the market after two days of absolute chaos in precious metals.

If these gains stick through the close, gold—as tracked by the SPDR Gold Shares (GLD)—would post its strongest single-day performance since November 2008. Yes, that November 2008. This comes after a brutal 13.5% two-day slide that marked the worst decline since 2013.

Silver, never one to be outdone on volatility, went even harder. Futures jumped nearly 12% to around $90 per ounce, clawing back from a historic 31% collapse over the previous two sessions.

So naturally, traders are asking the question that always follows a violent snapback: Was this capitulation marking a bottom, or just a brief pause before more pain?

The Warsh Shockwave That Started It All

To understand Tuesday's rally, you need to rewind to last Friday's carnage. Gold tumbled 9% while silver nosedived 26% after President Donald Trump nominated Kevin Warsh to become the next Federal Reserve chair when Jerome Powell's term ends in May.

Warsh is widely viewed as more hawkish than other potential Fed chairs. He's publicly advocated for a major "regime change" at the central bank, including sizable cuts to the Fed's balance sheet. That hawkish reputation sent the U.S. dollar higher—which typically moves opposite to gold—and triggered an abrupt repricing across precious metals markets.

Here's the thing: Gold and silver had rallied hard for over six months on fears that the Fed might lose its monetary anchor and cave to political pressure for lower rates. The Warsh nomination flipped that script instantly. If the new Fed chair is going to be a hawk who actually reduces the balance sheet, maybe those Fed independence fears were overblown. Markets adjusted accordingly, and violently.

Why Gold and Silver Bounced Back Tuesday

Enter Federal Reserve Governor Stephen Miran, who threw cold water on the hawkish narrative. In comments on Fox Business Tuesday, Miran said he still expects substantial interest rate cuts this year.

Miran argued that current policy is too restrictive for the economy and that underlying inflation pressures are "more benign," supporting the case for lower rates. "I'm probably looking for a little bit more than a point of interest rate cuts over the course of the year," he said.

He added that stronger growth prospects don't require higher interest rates and that the Fed can reduce borrowing costs without reigniting inflation. Interestingly, Miran also praised the Warsh nomination, calling him "a fantastic choice" to lead the Fed and saying he's excited to see what Warsh does in the role.

Miran's term as governor ended in January, but he remains in the position until a successor is confirmed. His dovish comments gave precious metals traders exactly the fuel they needed to pile back in.

Is the Worst Behind Us?

Some market watchers see Tuesday's move as a technical rebound after extreme positioning rather than a fundamental shift. David Morrison, senior market analyst at Trade Nation, noted that precious metals staged a sharp rebound after the brutal sell-off that began late last week.

Morrison pointed out that gold had slid toward $4,400—its lowest level in nearly a month—leaving prices down 21% from Thursday's high before rebounding sharply back above $4,900 in early trading.

Silver's moves were even more extreme. The metal slumped 41% from Thursday's high to Monday's low near $70 per ounce before staging its strong recovery.

"Could that mean the downside correction is over? Who knows," Morrison said. "But traders should not assume that it won't continue to be volatile."

According to Morrison, precious metals remain prone to whipsaw moves that can quickly turn painful and costly for traders caught on the wrong side. In other words, if you thought the last few days were wild, don't assume the ride is over. This market is still trying to figure out what a Warsh-led Fed actually means for monetary policy, and that process rarely happens in a straight line.

For now, the bulls are back. Whether they stick around is another question entirely.