Silver futures rebounded from the biggest weekly slump since at least 1975 and gold gained on renewed demand for precious metals as alternative assets.

The Standard & Poor’s GSCI Index of 24 commodities declined 11 percent last week, the most since December 2008, led by the 27 percent tumble in silver futures. The 14-day relative strength index for silver dropped to 34 from 90 in two weeks, a signal to some traders that the metal may be reaching oversold conditions.

“Gold and silver may regain strength as traders perceive last week’s commodities washout to be excessive and it isn’t viewed as a trend reversal,” said Park Jong Beom, Seoul-based trader with Tongyang Futures Co. “There’s no change in the outlook for a weaker dollar as well.”

Silver futures for July delivery advanced $1.793, or 5.1 percent, to $37.08 an ounce at 11:47 a.m. on the Comex in New York. A close at that price would mark the biggest gain for a most-active contract since November.

Gold futures for June delivery rose $16, or 1.1 percent, to $1,507.60 an ounce on the Comex after last week slipping 4.2 percent, the most in almost a year. The metal reached a record $1,577.40 on May 2.

Greece Rating Cut

Prices also gained after Standard & Poor’s cut Greece’s credit rating two levels, saying further reduction are possible as the risk of default rises. Before today, silver more than doubled in the past year and gold jumped 25 percent partly as global debt concerns boosted investor demand.

“Despite last week’s sell-off, very little has changed in terms of fundamentals,” said Tom Pawlicki, an analyst at MF Global Ltd. in Chicago.

Still, silver dropped as much as 34 percent from a 30-year high of $49.845 set on April 25 after Comex owner CME Group Inc. (CME) announced an 84 percent rise in margin requirements. A bear market is defined by some investors as a decline of 20 percent or more. Holdings in exchange-traded products backed by the metal tumbled 1.2 percent to 14,367.77 metric tons on May 6, the lowest level in six months, Bloomberg data show.

Speculators’ “stampede for the exit was responsible for last week’s ugly descent,” Edel Tully, an analyst at UBS AG in London, said today in a report to clients. “We don’t believe that investors and speculators have completely altered their outlook for silver, however, and though hopes for $50 have suffered a blow, they have not disappeared.”

Palladium futures for June delivery rose $13.15, or 1.8 percent, to $729.45 an ounce on the New York Mercantile Exchange. Platinum futures for July delivery climbed $6.60, or 0.4 percent, to $1,793 an ounce on Nymex.

To contact the reporters on this story: Nicholas Larkin in London at [email protected]; Pham-Duy Nguyen in Seattle at [email protected].

To contact the editor responsible for this story: Steve Stroth at [email protected].