Gold and silver prices fell sharply in a broader market selloff on Thursday, as an advance in the dollar to a near two-week high and signs of easing US-China trade tensions added further pressure on the precious metals.
Spot gold declined 2.5 per cent to $4,838.81 per ounce, as of 05:35am GMT (10:35am PST), retreating from a near one-week high hit earlier in the session.
US gold futures for April delivery dropped 1.9pc to$4,855.60 per ounce.
“The dollar received a new lease of life with the (Kevin) Warsh nomination (as Federal Reserve chief), and the currency has been able to keep making forward progress … traders are more circumspect now on gold in light of recent extreme volatility,” Tim Waterer, KCM chief trade analyst, said.
The dollar rose to a near two-week high on Thursday, making greenback-priced gold more expensive for other currency holders.
“Sentiment (has) turned soggy across most asset classes, including precious metals, cryptocurrencies and regional equities, with losses feeding into one another and creating a self-reinforcing feedback loop amid thin market liquidity,” said Christopher Wong, a strategist at OCBC.
Asia stocks faltered, tracking their US peers as concerns about the exploding costs of AI investment hounded the tech sector.
Spot silver plummeted another 14.9pc to $74.94 an ounce. Last week, the precious metal touched a record high of $121.64.
“The industrial demand has vanished at the higher levels. Most of the industrial buyers have stopped buying silver, and even solar panel producers in China are looking for alternatives,” Shah added.
On the geopolitical front, Iran and the US have agreed to hold talks in Oman on Friday, officials on both sides said. China is considering buying more US-farmed soybeans, US President Donald Trump said, after what he called “very positive“ talks with his Chinese counterpart Xi Jinping, on Wednesday.
“If you remove geopolitical tensions and the de-dollarisation trend for the time being … the metals have little room to run,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
Spot platinum slumped 8.7pc to $2,033.35 per ounce after hitting an all-time high of $2,918.80 on January 26, while palladium shed 5.8pc to $1,672.00.