The pullback came as concerns about US credit quality eased and trade frictions between China and the US hit demand for gold and silver at ports. President Donald Trump’s comments on Friday eased concerns about trade tensions, while solid results from regional banks helped stabilize the stock market and lift bond yields. Higher rates are generally negative for precious metals, which do not pay interest.
The historic tightness in the London silver market is also showing signs of easing, leading to some profit-taking by investors.
“London’s deficit is easing somewhat from extreme levels and as regional dislocations fade, there could be pressure and profit-taking,” said Nicky Shiels, head of metals strategy at MKS Pamp SA.
Silver set new all-time highs this week, approaching $54.50 an ounce on Friday before plummeting in a rally that appears to have happened too quickly, too quickly. A measure of price momentum known as the relative strength index indicates that too many people have bought silver since late September and signals the potential for a price decline. Gold is in a similar situation.
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