On Thursday, US stocks fell sharply, with the Nasdaq dropping over 2%. Some traders sold precious metals to cover losses in the stock market, leading to significant declines in gold, silver, copper, platinum, and palladium. The US Dollar Index saw a slight increase.
Amid renewed concerns over whether massive AI investments can truly be implemented on a large scale, US tech stocks declined. Metal prices suddenly dropped amid suspected algorithmic trading sell-offs, with some investors forced to exit commodity positions, including metals, for liquidity, while some funds shifted to US Treasuries for safety.
Spot gold once fell by 4.1%, while silver plummeted by 11%. Copper prices on the London Metal Exchange (LME) dropped by 2.9%. Metal prices later pared some of their losses:
At the close of New York trading on Thursday, spot gold fell 3.26% to $4,918.36 per ounce. Before 00:00 Beijing time, it maintained a slight decline, largely holding above $5,050, before experiencing a sharp plunge, hitting a daily low of $4,878.66. COMEX gold futures fell 3.06% to $4,942.50 per ounce.
At the close of New York trading on Thursday (February 12), spot silver fell 10.89% to $75.0942 per ounce. Before 00:00 Beijing time, it held steady above $82 with a slight decline, before a sharp drop below $76, hitting a daily low of $74.4456 near the close of US stocks. COMEX silver futures fell 10.56% to $75.050 per ounce.
Other important metals: COMEX copper futures fell 3.65% to $5.7740 per pound, spot platinum fell 6.19%, and spot palladium fell 5.89%.
What Do Analysts Say?
Regarding Thursday's gold and silver movements, industry insiders said: "This all happened too fast, it felt like a risk-off move. During periods of extreme market stress, even safe-haven assets like gold are sold by investors in urgent need of liquidity."
Part of the selling in gold and silver on Thursday also stemmed from profit-taking, as the previous rapid rally was partly driven by speculative buying.
Some industry insiders pointed out that for gold and silver, trading is still largely driven by sentiment and momentum. On days like this, they struggle.
Since 2024, gold and silver have surged strongly, with momentum-driven buying pushing metal prices to repeated new records. However, this trend halted abruptly on January 29, when gold recorded its largest single-day drop in over a decade, and silver saw its biggest decline on record. Since then, both metals have traded in a narrow range with increased volatility, lacking new catalysts.
Some analysts believe that Thursday's sudden drop in gold prices does not signal an imminent sustained downtrend. However, it does increase the likelihood of continued volatility in the short term. The market has cleared a significant chunk of lower liquidity, and the next move will depend on how prices perform near key technical levels.
Media analysis noted that despite a slight rebound, overall, metal prices were hit hard in a sudden vacuum-like decline, more akin to systematic strategy selling—such as momentum-driven de-risking operations common among CTA (Commodity Trading Advisor) groups when key levels are breached.
Despite recent sharp declines, many analysts still expect gold to resume its upward trend, believing the factors that drove the earlier rally remain—including geopolitical tensions, doubts about the Fed's independence, and a broader shift from traditional assets like currencies and sovereign bonds to alternative assets. J.P. Morgan Private Bank expects gold to reach $6,000 to $6,300 per ounce by year-end, while Deutsche Bank and Goldman Sachs maintain bullish views.
The world's largest silver ETF, iShares Silver Trust, saw significant trading in May/June $125 strike call options, while investors sold contracts previously bought at high levels, which may have further intensified selling pressure on silver.
Traders are now focusing on US economic data, including the key CPI data to be released on Friday, for clues on the Fed's interest rate path. Lower borrowing costs typically benefit non-yielding precious metals.
