Gold (GC=F) and silver (SI=F) prices fell on Thursday as a stronger dollar and signs of easing US-China trade tensions reduced demand for safe-haven assets.
Gold futures climbed 0.2% to $4,958.40 a troy ounce, while spot prices lost 3.1% to $4,936.24 at the time of writing.
Spot silver plummeted 11% to $80.75 an ounce after reaching a record high of $121.64 last week, while silver futures fell 5.2% to $80.01.
The decline came as the US dollar hovered near a two-week high, supported by US president Donald Trump’s nomination of Kevin Warsh as chair of the Federal Reserve. The move has fuelled speculation that the central bank could take a less dovish approach than previously expected, providing further support for the dollar.
“With the blink of an eye, volatility in the precious metals returns with silver falling 16% in quick time. It is common after a period of extreme volatility to experience a sequence of volatility aftershocks,” said Tony Sycamore, an analyst at IG.
“After the 20% plunge from $5,600, gold hit $4,400 before rebounding to $5,065. Extreme volatility like this typically brings aftershocks, and more turbulence is expected in the short term,” he added.
On the geopolitical front, Tehran and Washington are due to hold talks in Oman on Friday, according to officials from both countries. Separately, China may step up purchases of US grown soybeans, Trump said, following what he described as “very positive” talks with Chinese president Xi Jinping on Wednesday.
UBS (UBSG.SW) said that silver prices would need to fall even further “to make the metal attractive to us.”