Silver plunges 16% in Asian market — What's dragging down the precious metal?

Silver price today: Silver prices fell heavily on Thursday, giving back all gains made over the previous two sessions, as the metal continued to struggle after a historic market crash. Gold also moved lower as pressure remained across precious metals. Spot silver dropped as much as 16.6% during the session, even after briefly climbing back above $90 an ounce in early Asian trading. Gold prices were also volatile, sliding by as much as 3.5%. “Sentiment seems to have turned soggy across most asset classes, including regional equities and metals,” Christopher Wong, a strategist at Oversea-Chinese Banking Corp Ltd told Bloomberg. He added that this highlights fragile sentiment and has triggerd “a feedback loop amid thin market liquidity.” The sharp fall follows a strong rally last month, when precious metals rose quickly due to speculative buying, global geopolitical tensions and worries over the independence of the US central bank. That rally ended abruptly late last week. Silver recorded its biggest ever one-day fall on Friday, while gold saw its steepest drop since 2013. Markets are now focused on the policy outlook after Kevin Warsh was nominated as the next Federal Reserve chair. President Donald Trump said on Wednesday that he would not have chosen Warsh if he had supported raising interest rates. In an interview with NBC News, Trump said there was “not much” doubt the Federal Reserve would cut rates again, which usually supports precious metals as they do not offer interest. “Price action is likely to remain volatile until there is greater certainty on the monetary policy outlook,” Standard Chartered Plc analysts including Sudakshina Unnikrishnan said in a note. They said some of the recent swings were caused by investors pulling money out of exchange-traded products, but added that “structural drivers remain intact and we continue to expect a rebuild to the upside.” By 11:18 am in Singapore, silver was trading 12.7% lower at $76.9495 an ounce. Gold was down 2.1% at $4,859.20 an ounce. Platinum and palladium also declined, while the Bloomberg Dollar Spot Index rose 0.1%.