Silver Prices Fall 1.5% in Broad Retreat for Precious Metals

London (Aug 3)  Silver prices declined sharply in overnight trade, as precious metals reversed course following weeks of steady growth.

Silver for September settlement was down 24 cents, or 1.5%, to $16.49 a troy ounce at 7:23 a.m. ET. The metal touched a session low of $16.42.

Comex gold futures also fell in overnight trading, with prices bottoming at $1,262.90 a troy ounce. That was equivalent to a 1.2% drop. The December futures contract pared losses later in the day to trade at $1,269.40 a troy ounce. That represents a loss of $9.00, or 0.7%.

The pullback in metals likely stemmed from a technical correction, as investors absorbed a month-long rally in the market. The dip began on Wednesday and accelerated in Thursday’s Asian session.

The U.S. dollar, which often trades inversely with gold and silver, rose in overnight trade. The dollar index (DXY) was last up 0.2% at 93.03.

Investors sifted through a steady stream of economic data earlier in the day. China’s services PMI weakened in July to a reading that was on par with April’s nearly one-year low. The Caixin China services PMI dipped to 51.5 from 51.9 a month ago.

Earlier, the Australian government reported a marked drop in the national trade surplus, as exports fell following large gains the previous month. Canberra’s trade surplus stood at $856 million in June, down from $2.02 billion the month before.

In monetary policy, the Bank of England (BOE) voted to leave its stimulus program in tact on Thursday. In a 6-2 vote, the Monetary Policy Committee (MPC) held the benchmark interest rate at 0.25% and maintained the asset purchase facility at £425 billion.

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