Quick overview

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Silver struggled to find a floor and fell sharply after a historic market rout, wiping out a two-day recovery.

 

Spot silver fell as much as 20% on Thursday, after briefly surpassing $90 per ounce in early Asian trading. The metal has dropped more than a third from an all-time high reached on January 29 following a record-breaking rally that seemed to go too far, too quickly.

According to Christopher Wong, a strategist at Oversea-Chinese Banking Corp., “sentiment seems to have turned soggy across most asset classes, including regional equities and metals.” According to him, this has produced “a feedback loop amid thin market liquidity.”

Base metals markets were also impacted by the abrupt and severe drop in precious metals, with copper falling more than 1% to fall below $13,000 per ton. In the meantime, spot gold saw a 3.5 percent decline in volatile trading.

Last month, speculative momentum, geopolitical unrest, and worries about the US central bank’s independence all contributed to the surge in precious metals. That spike ended abruptly last week, with gold falling the most since 2013 and silver experiencing its largest daily decline ever on Friday. Large positions accumulated by investors, a surge in call-option purchases, and significant inflows into leveraged exchange-traded products served as additional fuel.

markets are currently considering the policy ramifications of Warsh’s nomination as Federal Reserve chair, with President Donald Trump stating on Wednesday that he would not have nominated Kevin Warsh for the position if he had indicated a desire to raise interest rates. In an interview with NBC News, Trump stated that there was “not much” doubt that the Fed would cut rates once more.

Silver has historically been more volatile than its pricer cousin because of its smaller market size and lower liquidity. However, the magnitude and speed of recent price movements are noteworthy, and they have been made worse by significant speculative inflows and a decline in over-the-counter trading