Gold and silver recovered from their steepest selloffs in years, while Asian stocks also pared losses after a listless performance on Wall Street.
Gold steadied after an earlier decline of 2.9% that extended its worst intraday drop in more than a dozen years on Tuesday. Silver edged higher following a 7.1% fall in the prior session.
A gauge of Asian equities trimmed an earlier decline to shed 0.2%. The weakness across the region’s stock markets partially stemmed from selling in precious-metal shares from Australia to Indonesia and China. US stock futures saw mild gains in Asia after the S&P 500 Index closed little changed.
The dollar and Treasuries were mostly steady. Oil jumped following a report that the US and India are nearing a trade deal that could see the South Asian nation gradually reducing imports of Russian crude.
“The metals’ selloff looks more like a positioning purge than a macro shock,” said Charu Chanana, chief investment strategist at Saxo Markets.
Traders remain on guard for “signs of systematic selling across assets” that could include wider credit spreads and a rising dollar, she added. The heightened focus on precious metals follows a rapid rally earlier this year that was fueled by central banks-led buying and worries about fiscal woes in developed countries.
The slumps also came after technical indicators showed the recent scorching rallies were likely overstretched. Despite recent de-risking amid concerns over trade and credit, stock exposure among global macro hedge funds and long-only strategies remains at the highest in over a year, according to Barclays Plc.
