Recovery in precious metals is short lived as gold falls, silver plummets 15%
Gold prices fell Thursday, reversing earlier gains, while silver plummeted in a sharp reversal of the short-lived rebound seen this week.
At 14:41 ET (19:41 GMT), Spot gold fell 2.7% to $4,830.83 an ounce, and gold futures for April fell 2% to $4,852.01/oz.
Spot silver tumbled 15.6% to $74.4235/oz and Silver futures for March slid 12.3% to $74.035/oz.
Silver was by far the worst performer in metals Thursday, with losses 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 remained in play, and that the metal was likely to benefit from its status as a precious and industrial metal.
Broader metal prices also retreated.
Spot platinum fell 7.3% to $2,020.00/oz.
Metal prices were also pressured by a stronger dollar, as the U.S. currency 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.
The Bank of England and the European Central Bank both kept interest rates unchanged earlier Thursday, a widely expected.
Gold’s 2025 drivers still relevant
Gold notched its best annual performance last year since 1978, a whopping 67.5% advance, and the safe-haven asset showed no signs of slowing down in 2026 until last Friday’s collapse.
The annual performance was driven by investors flocking to the safe-haven asset amid Trump’s trade war, expectations of interest rate cuts, supply constraints, and persistent central bank purchases.
"Heading into 2026, the biggest drivers for gold and silver are falling interest rates, aggressive central bank buying, and a world that still feels economically and geopolitically uncertain. Major banks are already projecting prices well into the five-thousand-dollar range and beyond, largely because central banks continue to diversify reserves and investors are looking for stability," Max Baecker, president of American Hartford Gold, told Investing.com.
"At the same time, a weaker dollar and persistent global tensions have historically pushed investors toward safe-haven assets, which helps explain why precious metals have been hitting record highs," he said.
"For consumers, that strength has a practical impact. Higher spot prices typically translate into higher jewelry costs, so buyers should pay closer attention to purity and long-term value. Gold jewelry can absolutely be a luxury purchase, but in an environment like this, it can also serve as a tangible store of wealth," Baecker added.
Source: Investing.com
