Silver extended its steep decline on Thursday, falling 12.7% to $76.9495 an ounce as of 11:18 am in Singapore, while gold also came under pressure amid heightened volatility in precious metals markets. Spot gold was down 2.1% at $4,859.20 an ounce.
The sharp move erased silver’s brief two-day rebound, with the metal struggling to find a price floor after last week’s historic rout. At one point during the session, spot silver plunged as much as 16.6%, despite having briefly climbed above $90 an ounce in early Asian trading. Gold, meanwhile, slid as much as 3.5% in choppy trade.
Other precious metals also weakened, with platinum and palladium posting losses. The Bloomberg Dollar Spot Index edged up 0.1%, adding pressure to metals prices.
“Sentiment seems to have turned soggy across most asset classes, including regional equities and metals,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp Ltd. “This underscores fragile sentiment and has created a feedback loop amid thin market liquidity.”
Precious metals had surged last month, driven by speculative momentum, geopolitical tensions and concerns over the independence of the US Federal Reserve. However, the rally abruptly reversed at the end of last week, with silver recording its biggest-ever single-day drop on Friday and gold suffering its steepest fall since 2013.
Markets are now assessing the policy implications of Kevin Warsh’s nomination as Federal Reserve chair. President Donald Trump said on Wednesday that he would not have nominated Warsh had he signalled an intention to raise interest rates. Trump added in an interview with NBC News that there was “not much” doubt the Fed would cut rates again — a development typically supportive of non-yielding assets such as gold.
Despite the sell-off, analysts caution that volatility may persist in the near term. “Price action is likely to remain volatile until there is greater certainty on the monetary policy outlook,” Standard Chartered Plc analysts, including Sudakshina Unnikrishnan, said in a note. They added that some of the recent swings are being driven by redemptions in exchange-traded products, though “structural drivers remain intact and we continue to expect a rebuild to the upside.”
