04.02.202115:04 Forex Analysis & Reviews: Prices of precious metals are returning to their usual course

Prices on the precious metals market slightly decline on Thursday morning. The reason for the negative trend was a good strengthening of the US dollar.

Gold futures for April delivery on the New York trading floor fell 0.76% or $13.9, to $1821.2 per troy ounce.

Silver futures contracts for March delivery are also declining. Its current level is already lower than the previous one by 1.79%, to $26.4 per troy ounce.

Copper futures contracts for March delivery lost 0.18%, and the current level is concentrated in the area of $3.5562 per pound.

The cost of precious metals again began to experience significant pressure against the background of the growth of the US dollar. The dollar index against a basket of six major currencies rose 0.15% and moved to the level of 91.237. The euro against the dollar fell to its minimum values, which has not been observed for two months in a row. The rising dollar makes investors who are not holders of this currency refuse to buy precious metals since the exchange rate difference has increased significantly. Less availability leads to an outflow of potential buyers and a reduction in the exchange rate of precious metals.

Most experts point to the fact that the dynamics of the value of silver again returned to its previous, more traditional level, which happened after a grand jump that lasted for several days. Note that the quotes of the precious metal began to demonstrate steady and rapid growth after the activity of private investors in this sector increased sharply. Moreover, the growth was noted on the online platform Reddit. All of this quickly enough sent the price of silver to the highest values in the last eight years. However, the joy was short-lived: soon the silver quotes also began to significantly reduce their positions, which lowered their value, if not to the previous level, then close to it. It was not possible to fix the success, and the mood on the precious metals market quickly changed the vector.

The attack by a group of private investors from the social media platform Reddit was unsuccessful because the silver market is too large and liquid. However, the attempt itself speaks volumes. For example, that an artificial "bubble" in the precious metals market is quite easy to inflate with a strong desire. At the same time, the most vulnerable points of the precious metals market have become clearer.

Now, in the foreseeable future, gold will have to look for new factors for growth or take a wait and see attitude and move up and down in a corrective manner.