- Gold fell sharply, reversing gains after reaching a record above $5,500 an ounce
- The US dollar strengthened, causing gold to drop as much as 5.7% intraday
- Silver prices declined by up to 8.4% amid broader market sell-offs
Gold fell the most since October, reversing earlier gains that took the precious metal to a fresh record above $5,500 an ounce, as the US dollar strengthened.
A rebound in the greenback helped drive down bullion by as much as 5.7% in the biggest intraday drop since Oct. 21, before paring some of the losses. Silver dropped as much as 8.4%. A gauge of the dollar rose as much as 0.3%, reversing earlier declines.
Declines in the equities market also sparked a liquidation in other assets, including precious and industrial metals, according to Phil Streible, chief market strategist at Blue Line Futures. “It just seems like we've hit some peak euphoria,” he said in an interview.
Gold advanced sharply this year with heightened geopolitical tensions and worries about the independence the Federal Reserve, which have supported the debasement trade. The precious metal had climbed more than 20% just this month, with some technical indicators pointing to a near-term price correction.
“Given the frothiness in the markets and the dominance of flows over fundamentals, it does not need much for a correction,” said Julius Baer Group Ltd.'s Carsten Menke.
Gold's relative strength index spiked above 90 and silver's was around 84. Readings above 70 typically signal the metal has been bought so heavily it could be due for a pause or pullback.
Spot gold fell 2.6% to $5,276.43 an ounce as of 11:43 a.m. in New York. Spot silver fell 3.2% to $113.01 an ounce.
ALSO READ: Gold Price Likely To Extend Gains; Silver May Ease This Week, Say Analysts
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