Gold prices reversed early gains and fell in Asian trade on Thursday, while silver plummeted in a sharp reversal of a short-lived rebound seen this week.
A rout in metal markets largely resumed after brief respite this week, as strength in the dollar, ahead of key central bank meetings in Europe, weighed on the sector.
Spot gold fell 1.3% to $4,899.18 an ounce by 00:53 ET (05:53 GMT), while gold futures for April fell 0.6% to $4,919.49/oz.
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Silver plummets after short-lived recovery Silver was by far the worst performer in metals, with spot silver tumbling as much as 16% to $73.5565/oz in Asian trade. Silver futures for March tumbled by a similar margin, hitting an intraday low of $73.383/oz.
Losses were seen starting in Chinese markets, with a rout in Shanghai silver futures spilling over into spot trade. Wednesday’s losses also saw silver largely wipe out a recent rebound and come back in sight of lows hit last week.
"Even as prices of precious metals are now less elevated following the correction, sensitivity to the USD, yield repricing, and uncertainty around Fed policy under new leadership remains high. While positioning has likely reset to some extent, confidence may not have fully restored, pointing to a potential period of choppier, two-way trading," Christopher Wong, FX strategist at OCBC said in a mailed comment.
Still, Wong noted that the fundamentals behind silver’s recent gains still remained in play, and that the metal was likely to benefit from its status as a precious and industrial metal.
Broader metal prices also largely retreated. Spot platinum slid 6.8% to $2,089.85/oz. Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.8% to $12,950.0 a tonne.
Dollar strength pressures metal prices as BoE, ECB meetings loom Metal prices were also pressured by a stronger dollar, with traders pivoting to the greenback in anticipation of interest rate decisions by the Bank of England and the European Central Bank, both due on Thursday.
The dollar also caught some bids ahead of key U.S. nonfarm payrolls data due next week. The print, initially due on Friday, was delayed to February 11 due to a partial U.S. government shutdown, officials said earlier this week.
The greenback extended gains from last week after U.S. President Donald Trump nominated Kevin Warsh as the next chairman of the Federal Reserve.
Warsh is viewed as the less dovish pick, and could keep broader monetary policy tight, even as interest rates fall.
