Gold and Silver Prices Fall Amid Broad Market Selloff: What Investors Need to Know for Strategic Business Planning
Bengaluru: Gold and silver prices experienced a sharp decline on Thursday amid a broad market selloff, driven by a surge in the U.S. dollar to its highest level in nearly two weeks and indications of easing trade tensions between the U.S. and China. Spot gold dropped 2.5% to $4,838.81 per ounce as of 0535 GMT, retreating from a near one-week high reached earlier in the day. Meanwhile, U.S. gold futures for April delivery fell 1.9% to $4,855.60 per ounce.
Tim Waterer, chief trade analyst at KCM, noted that the nomination of Kevin Warsh as Federal Reserve chief boosted the dollar, which has maintained forward momentum. This development, combined with recent volatility, has made traders more cautious about gold.
The dollar’s rise made gold, priced in greenbacks, more expensive for holders of other currencies, adding further pressure on the precious metal. Christopher Wong, strategist at OCBC, highlighted a weakening sentiment across multiple assets, including precious metals, cryptocurrencies, and regional equities, with losses reinforcing each other amid thin market liquidity.
Asian stock markets slid, following declines in the U.S., as concerns over the soaring costs of artificial intelligence investments weighed heavily on the tech sector. Spot silver plunged 14.9% to $74.94 an ounce, a significant drop following last week’s record high of $121.64.
Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, explained that industrial demand for silver has disappeared at elevated prices. Many industrial buyers, including Chinese solar panel manufacturers, are seeking alternatives.
On the geopolitical front, officials from Iran and the U.S. confirmed plans to hold talks in Oman on Friday. Additionally, U.S. President Donald Trump described recent discussions with Chinese President Xi Jinping as “very positive,” with China reportedly considering increased purchases of U.S.-farmed soybeans.
Shah added that without geopolitical tensions and the current trend of de-dollarization, precious metals have limited potential for price increases. Spot platinum fell 8.7% to $2,033.35 per ounce after reaching an all-time high of $2,918.80 on January 26, while palladium decreased 5.8% to $1,672.00 per ounce.
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The sharp decline in gold and silver prices amid a stronger dollar and easing U.S.-China trade tensions signals a shift away from precious metals as safe-haven assets, posing risks for Omani businesses reliant on metal trading and investment. However, this also opens opportunities for sectors tied to industrial metals and alternative materials, especially in technology and renewable energy industries. Smart investors should monitor geopolitical developments and currency trends closely to capitalize on market volatility and adjust portfolios accordingly.
