Silver Prices Lose Their Shine as Risk Appetite Returns

London (Aug 15)  Silver prices declined sharply on Tuesday in a broad retreat for precious metals, as risk appetite returned to the financial markets.

Comex silver futures for September delivery fell 27 cents, or 1.6%, to $16.85 a troy ounce at 7:36 a.m. ET. Prices were down by as much as 1.9% earlier in the session. The grey metal crept higher on Monday even as gold prices fell.

December gold futures were down for a second straight session, falling $10.60, or 0.8%, to $1,279.80 a troy ounce. With the decline, bullion appears to be completing a triple-top formation extending all the way back to April.

Gold’s premium over silver has declined sharply since the beginning of the month. As of Monday’s close, the gold/silver ratio was 75.13, its lowest since mid-July.

Precious metals have come under selling pressure amid signs that the Trump administration will attempt to quell tensions with North Korea. In a Sunday article published by The Wall Street Journal, Secretary of State Rex Tillerson and Secretary of Defense James Mattis stated that they would pursue diplomatic resolutions with the Communist state.

Stock prices surged as a result, with the S&P 500 rising 1% on Monday. The index fell 1.4% in all of last week. European stocks also rebounded from five-month lows on Monday, with the Stoxx Europe 600 gaining more than 1%.

Futures trading was largely upbeat during the pre-market hours, with all of Wall Street’s major indexes on track for large gains.

In currencies, the U.S. dollar index (DXY) rose briskly against a basket of world peers. The DXY basket was up 0.4% at 93.75, its highest in over two weeks.

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