(Kitco Commentary) - Precious metals experienced sharp declines Thursday morning as a broad-based selloff swept across multiple asset classes, with analysts attributing the move to forced liquidation rather than fundamental factors.
Gold fell $163, or 3.21%, to settle at $4,921, while silver dropped $9.00, or 10.73%, to $75.22. The 30-minute plunge between 11:00 and 11:30 a.m. EST marked the worst intraday decline for both metals since January 29, when gold shed nearly $500 and silver lost 26% of its value.
The selloff originated in the artificial intelligence sector, with companies like Nvidia and Alphabet experiencing weakness as early as 9:00 a.m. EST. Alphabet began declining at 9:00 a.m. and found temporary support by 10:00 a.m.—a full 30 minutes before the selloff broadened to other sectors.
By 10:30 a.m., the contagion had spread to broader U.S. equities, with the Nasdaq falling 2% and the S&P 500 declining 1.57% by 11:00 a.m. The selloff then extended into commodities, hitting precious metals particularly hard.
Bloomberg MLIV Macro Strategist Michael Ball characterized the move as systematic selling rather than fundamental weakness: "Thursday's AI-disruption driven risk-off tone in equities is starting to broaden out, with metals dropping suddenly on what looks like algo selling. While there's been a small bounce, metals are overall getting hit hard in a sudden air-pocket kind of move lower that feels more like systematic strategy selling—the kind of momentum-driven de-risking you often see from the CTA community when levels give way."
The sharp decline appears unrelated to any fundamental shift in precious metals sentiment. While some market participants suggested the move represented a delayed reaction to Wednesday's stronger-than-expected jobs data, the timing and pattern of selling do not support that interpretation.
Market participants will be closely monitoring Friday's January CPI release, with consensus estimates calling for an annual increase of 2.5%—data that could potentially influence near-term sentiment in precious metals and broader markets.
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