Silver dropped sharply, wiping out 2 days of gains amid a broader market rotation
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- Silver slid, giving back a brief rebound after last week's record highs and sharp selloff.
- Gold retreated as dollar strength pressured precious metals.
- The move came amid a broader rotation, with tech stocks and crypto also under pressure.
Silver prices slumped as precious metals came under renewed pressure amid a broader market pullback.
The spot silver price was 9.2% lower around $80.05 per troy ounce at 2:27 a.m. ET on Thursday. Prices had dropped as much as 17% earlier in the session.
Thursday's slide erased two days of gains for the white metal, which plunged as much as 36% on Friday at the height of the selloff.
The drop marks a sharp reversal for a market that had been on a tear just days earlier, with silver hitting a record high above $121 per ounce last week.
Gold also retreated, slipping below the $5,000 level to trade around $4,934 per ounce.
Prices of the precious metals came amid a rise in the US Dollar Index to a two-week high, which makes dollar-denominated commodities pricier.
"The inverse relationship between precious metals and the US dollar has reasserted itself, leaving gold and silver particularly sensitive to near-term FX moves," wrote Ewa Manthey, a commodities strategist at ING on Tuesday.
"Looking ahead, the dollar is likely to remain a key driver of short-term price action, with precious metals broadly moving in the opposite direction," she added.
Analysts warn that silver is likely to remain especially volatile, as the market is far smaller than gold — a dynamic that can amplify price swings.
Even before Friday's selloff, hedge funds had already been trimming long positions in silver and other metals, with managed money reducing exposure to surging metals and reallocating into energy and other commodities.
Broad selloff
In other corners of the market, risk assets more broadly were under pressure, with tech stocks and cryptocurrencies sliding in choppy trading.
Software stocks came under pressure this week after Anthropic unveiled a new AI tool capable of handling clerical and administrative work in the legal sector. Legal software companies bore the brunt of the initial selloff, before losses rippled through the wider software space.
"In addition to accelerating layoffs of jobs replaced by AI solutions, software continues to sell off as advances in quick AI solutions threaten all but those players with major moats around their client relationships," wrote Louis Navellier at Navellier & Associates on Wednesday.
Stephen Parker, co-head of global investment strategy at JPMorgan Private Bank, told CNBC on Wednesday that the tech selloff reflects a healthy rotation, with investors pivoting away from a tech-driven market in search of better opportunities elsewhere.
The tech selloff spilled over into Asia with tech stocks. On Thursday, Samsung Electronics and SoftBank Group Corp. falling by 6% and 7% respectively.
Bitcoin was trading around $71,200, down roughly 7% over the past 24 hours and about 19% lower over the last seven days.