Gold, Silver Slide As Dollar Climbs To Two-month Peak

Gold and silver prices dropped on Thursday as a firmer dollar dented their appeal, while investors awaited the passage of a massive stimulus package in the United States and the Bank of England’s policy outlook.

Spot gold dropped 0.6% to $1,822.81 per ounce by 0712 GMT. U.S. gold futures fell 0.7% to $1,822.90.

Silver declined 1.1% to $26.56. Prices have eased since hitting a near eight-year peak of $30.03 on Monday as the social media-driven rally fizzled out.

“The moves in silver have been largely speculation and it’s becoming apparent that does not have a lasting effect,” said Michael McCarthy, chief market strategist at CMC Markets.

The dollar at a two-month peak was weighing on precious metals, McCarthy said, adding “central bank watch is key now … any hint around tapering could impact gold and silver.” [USD/]

The Bank of England policy decision is due at 1200 GMT.

The recent speculative move in silver has worn off since prices could not break above $30, although a spurt in demand from the industrial sector can boost prices again, said Hareesh V, head of commodity research at Geojit Financial Services.

Australia’s Perth Mint posted a 23.5% jump in January silver coin sales.

Further weighing on gold was benchmark 10-year Treasury yields at over a three-week peak and a surge in crypto currencies.

Investors’ focus also remained on a $1.9 trillion U.S. coronavirus aid plan, which was passed by the U.S. House without Republican support.

“The biggest risk to gold is stronger recovery as vaccines rollout, to the extent that we see U.S. bond yields rally,” said Lachlan Shaw, National Australia Bank’s head of commodity research.

But “if the vaccine rollout faces uncertainty, with these new emerging strains, then prices can still remain supported.”

Platinum fell 1.4% to $1,086.12 an ounce and palladium lost 0.5% to $2,262.68.

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