Risk-Off Strikes Again: Gold Corrects, Silver Plunges
Gold prices weakened on Thursday (February 5th) after attempting a recovery, while silver returned to the spotlight due to its much sharper decline than other metals. The market is highly sensitive: on the one hand, the safe-haven narrative remains, but on the other, the strengthening dollar and risk-off are causing speculative positions to be quickly "whipped."
In the latest trading, gold was around $4,860/oz (spot), while silver was around $77.45/oz.
At these levels, gold has generally fallen around 3% compared to the previous day's movement, and silver is still down tens of percent despite having attempted a rebound.
The key reasons for the metals' reversal are: a strengthening US dollar makes USD-denominated commodities more expensive for non-US buyers, plus yields and interest rate expectations are making investors more selective in holding non-yielding assets (like gold/silver).
What further "shakes" the market is the mixed direction of US employment data. Yesterday's ADP was weak, but the market was also awaiting the big NFP data—and this became even trickier because the January NFP release was reportedly pushed back to February 11th due to scheduling disruptions during the shutdown.
In silver, the pressure was even more brutal because the market is naturally thinner and more volatile. Once there was a large sell-off (especially from the Asian session), the effects quickly spread to the global spot market—ultimately bringing silver back to near its low, making the market uncomfortable.
Meanwhile, central bank factors also played a role: the ECB and the BoE were both in the market's focus this week, and the generally cautious global policy tone made risky assets prone to change direction—ultimately pulling the metal along with the current of risk sentiment.
Source: Newsmaker.id
