Silver exchange traded funds dropped 4% Wednesday in continued selling after the Federal Reserve minutes suggested the central bank likely won’t engage in further quantitative easing unless the economy backslides.
“What we see today is a rather broad-based sell-off in financial markets,” said Carsten Fritsch, an analyst at Commerzbank, in a MarketWatch report. “The trigger was yesterday’s Fed minutes which dashed hopes of (a third round of quantitative easing.)”
Meanwhile, gold ETF such as SPDR Gold Shares (NYSEArca: GLD) slipped more than 1%.
Gold is weakening toward $1,600 an ounce but some analysts think the long-term trend for the precious metal remains higher.
“I wouldn’t be surprised if we push lower towards $1,600- – that is what we think is a floor and we are unlikely to fall substantially below that,” said Standard Bank analyst Walter de Wet in a Reuters report.