Silver, which had surged alongside gold on safe haven demand and speculative inflows, also remained under pressure after last Friday’s 30% nosedive that saw the metal log its worst day since March 1980.<\/p>\n
Spot prices<\/a> of the white metal were down more than 12%, before paring losses to $83.4 per ounce as of 6:40 a.m. ET.<\/p>\n The CME Group increased margin requirements<\/a> following the steep sell-off last week, effective Monday after market close. Margins on COMEX gold futures have been raised to 8% from 6%, while those on the COMEX 5,000-ounce silver futures were lifted to 15% from 11%.<\/p>\n Stock Chart IconStock chart icon Gold and silver extend sell-off after historic plunge<\/p>\n According to analysts, the pullback follows from the violent reversal on Friday, when optimism around U.S. interest-rate cuts collided with a sudden reassessment of Federal Reserve leadership after President Donald Trump nominated<\/a> former Fed Governor Kevin Warsh to succeed Chair Jerome Powell after his term ends in May.<\/p>\n “The ‘Buy America’ trade is back as a result, and the independence bid that drove gold and silver to nosebleed record heights right below $5,600 and $122 per ounce early Thursday morning is unraveling,” Jos\u00e9 Torres, senior economist at Interactive Brokers, said in a note on Monday.<\/p>\n Christopher Forbes, head of Asia and the Middle East at CMC Markets, said gold’s sharp retreat reflects a classic correction after an extraordinary rally rather than a breakdown in the longer-term bullish thesis.<\/p>\n Gold’s retreat is a “classic air-pocket after an extraordinary run,” Forbes said. “Profit-taking, a firmer dollar, and fresh geopolitical headlines from Washington have knocked froth off a crowded trade.”<\/p>\n The dollar index, which measures the strength of the greenback against a basket of currencies, has strengthened about 0.8% since Thursday.<\/p>\n A stronger dollar makes greenback-priced gold less attractive for foreign buyers, while higher rates raise the opportunity cost of holding the non-interest-paying yellow metal by making Treasurys more attractive as a safe haven. <\/p>\n![\"hide](\"https:\/\/static-redesign.cnbcfm.com\/dist\/a54b41835a8b60db28c2.svg\")
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