On Thursday, U.S. stocks fell sharply, with the Nasdaq dropping over 2%. Some traders sold precious metals to offset losses in the stock market, leading to significant declines in gold, silver, and copper, while platinum and palladium also fell. The U.S. dollar index rose slightly.
As concerns grow about whether massive investments in artificial intelligence can truly scale, U.S. tech stocks declined. Metal prices suddenly dropped under suspected algorithmic trading sell-offs, forcing some investors to exit commodity positions, including metals, to gain liquidity, while some funds shifted to U.S. Treasury bonds for safety.
Spot gold briefly fell by 4.1%, and silver plummeted by 11%. Copper prices on the London Metal Exchange (LME) dropped by 2.9%. Subsequently, metal prices narrowed some of their losses.
By the end of trading in New York on Thursday, spot gold was down 3.26%, priced at $4,918.36 per ounce, maintaining a slight decline before 00:00 Beijing time, primarily stabilizing above $5,050, before experiencing a sharp drop that refreshed the daily low to $4,878.66. COMEX gold futures fell by 3.06%, priced at $4,942.50 per ounce.
<h2>What do analysts think?</h2>
Regarding the movements of gold and silver on Thursday, industry insiders stated: “Everything happened too quickly; it feels like a risk-off market. During extreme market pressure, even safe-haven assets like gold can be sold off by investors in urgent need of liquidity.”
Some of the selling in gold and silver on Thursday also stemmed from profit-taking, as a previous surge was partly driven by speculative buying.
Industry insiders pointed out that trading in gold and silver is largely driven by sentiment and momentum. On such days, they tend to perform poorly.
Since 2024, gold and silver have risen sharply, with momentum-driven buying pushing metal prices to new highs. However, this trend abruptly halted on January 29, when gold recorded its largest single-day drop in over a decade, and silver experienced its largest recorded drop. Since then, both metals have oscillated within a narrow range, with increased volatility due to a lack of new catalysts.
Some analysts believe that Thursday's sudden drop in gold prices does not indicate that it is about to enter a sustained downtrend. However, it does increase the likelihood of continued volatility in the short term. The market has cleared a significant portion of the lower liquidity area, and the next movement will depend on price performance near key technical levels.
Media analysis indicates that despite a slight rebound, overall, metal prices were severely impacted by a sudden drop resembling a &#34;vacuum decline,&#34; more akin to systematic strategy sell-offs, which are common momentum-driven risk-off operations by CTAs (Commodity Trading Advisors) when key price levels are breached.
Despite the recent sharp decline, many analysts still expect gold to regain an upward trend, believing that the factors driving the previous rise remain in place—such as geopolitical tensions, doubts about the independence of the Federal Reserve, and a broader trend of shifting from traditional assets (like currencies and sovereign bonds) to other assets. JPMorgan Private Bank expects gold prices to reach $6,000 to $6,300 per ounce by the end of the year, while Deutsche Bank and Goldman Sachs also maintain a bullish outlook
The world's largest silver ETF, iShares Silver Trust, has seen a large volume of call option trading with a strike price of 125 for May/June. At the same time, investors are selling contracts that were previously bought at high prices, which may further intensify the selling pressure on silver.
Traders are currently focusing on U.S. economic data, including the crucial CPI data to be released on Friday, to look for clues about the Federal Reserve's interest rate path. Lower borrowing costs typically benefit precious metals that do not generate interest income

SILV

601899

On Thursday, spot gold fell by 4.1% at one point, while silver plummeted by 11%. Amid renewed concerns about whether massive AI investments can truly be implemented on a large scale, U.S. tech stocks experienced a significant decline. Analysts stated that metal prices suddenly dropped under suspected algorithmic trading sell-offs, forcing some investors to exit positions in commodities, including gold and silver, to obtain liquidity

- On Thursday, U.S. stocks fell significantly, leading traders to sell precious metals to cover losses, causing sharp declines in gold, silver, and copper prices.  
- Concerns about the feasibility of large AI investments coincided with the drop in tech stocks, prompting investors to liquidate positions in commodities for liquidity, with some funds moving to U.S. Treasury bonds for safety.  
- Analysts suggest that despite the sharp decline, driven partly by profit-taking following prior gains, factors supporting a recovery in gold prices remain, with projections for gold potentially reaching $6,000 to $6,300 per ounce by year-end.

Wallstreetcn

Silvercrest Metals

Zijin Mining

Newmont

Agnico Eagle Mines

Kinross Gold

ZHONGJIN GOLD

SD-GOLD

ChinaAMC CSI SH-SZ-HK Gold Industry Equity ETF

SPDR Gold Shares

Global X Silver Miner

EFUND GOLD MI-R

SPDR S&P Mtls & Mng

GLOBAL X Gold Explorers

YieldMax Gold Miners Opt Inc Strgy ETF

Abrdn Silver ETF Trust

VanEck Junior Gold Miners ETF

Sprott JR Gold Miners ETF

iShares Gold Trust

VanEck Gold Miners ETF

Sprott GLD Miners Etf

iShares Silver Tr

Roundhill Gold Miners Weeklypay ETF

EFUND GOLD MI ETF

iShares MSCI Global Gold Miners

EFUND GOLD MI-U

Abrdn Gold ETF Trust

Invesco Db Precious Metals ETF

Gold and silver plummeted on Thursday, triggered by algorithmic trading sell-offs due to a sharp decline in U.S. stocks?