Silver tumbled to a 5-week low on Thursday, on track for its biggest weekly slide since 1983, caught up in a broader commodities selloff and gold fell to its lowest in more than a week.
Spot silver fell more than 5 percent to $37.32 an ounce, down about 20 percent so far this week. It was bid at $37.70 an ounce at 1310 GMT from $39.34 on Wednesday.
Silver selling pressure was reinforced, after another rise in margin requirements for U.S. silver futures, while global holdings of silver in exchange-traded funds staged their biggest one-day decline this year.
"Was silver a bubble? I think to a large extent it was. It's notoriously volatile. The fundamentals of silver are simply not as good as gold's," said Stephen Briggs, analyst at BNP Paribas.
The Chicago Mercantile Exchange Group raised margin requirements for the 5,000-ounce COMEX silver futures, increasing the cost of trading the metal.
Investors also scrambled out of physical silver, as reflected by the 15.3-million-ounce fall on Thursday in holdings of metal in global ETFs, with the world's largest — the iShares Silver Trust staging the second-biggest one-day fall since its inception in 2006.
iShares holdings peaked at 11,390.6 tons on April 25, the same day that COMEX silver futures hit a 31-year high.
"Everyone is taking the view that commodities will have some sort of big shake-up and you'd be foolish to think otherwise," said ANZ head of metal sales Peter Hillyard.
A flurry of investor liquidation prompted gold to pare earlier gains and slide more than 1 percent to $1,495.70 a troy ounce, its lowest since April 26.
Spot gold was bid at $1,504.75 an ounce, having retreated from a session high of $1,521.69, and compared with $1,515.65 late in New York on Wednesday. COMEX gold futures were last down 0.6 percent at $1,505.6.
"Silver looks set for another frenzied, seatbelt-required trading day," said UBS analyst Edel Tully in a note.
"The gold-to-silver ratio has extended higher, to 39 ... while silver is on this dangerous jaunt to the downside — which also includes impressive short-term rebounds — gold will not be immune, although our preference certainly rests with gold."
A stronger dollar against the euro after the European Central did not signal an imminent interest rate hike weighed on precious metals. But overall the generally weaker dollar is expected to help support commodities priced in dollars.
Platinum was down $1,797.99 an ounce from $1,817.25 on Wednesday and palladium at $728.72 from $743.50.
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