published Jul 4th 2016, 9:59 pm, by Ranjeetha Pakiam

(Bloomberg) —
Silver tumbled after posting its biggest two-day advance in five years, with precious metals declining as the dollar snapped five days of losses.

Silver for immediate delivery lost as much as 3.9 percent to $19.5325 an ounce and traded at $19.9750 by 10:42 a.m. in Singapore, according to Bloomberg generic pricing. The metal rose 8.6 percent in the two days through Monday, the most since May 2011, briefly topping $21 for the first time in two years.

Gold dropped 0.5 percent to $1,344.11 an ounce after a four-day advance. Palladium lost as much as 4.1 percent and platinum fell 1.3 percent following an 11 percent jump in the seven days to Monday. The Bloomberg Dollar Spot index was 0.1 percent higher, making commodities denominated in the greenback more expensive in other currencies.

While precious metals have rallied this year — silver is up 44 percent and gold by 27 percent — silver’s 14-day relative-strength index was at 86.1 on Monday, above the 70 mark that indicates to some traders that the market is overbought and prices poised to decline.

“It’s often the case that you get silver and platinum more volatile than gold,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said on Bloomberg TV. “So they tend, when bull markets really get going, often to rally more than gold, and of course the flip side is that when things change, they fall more heavily.”

Market Turbulence

Gains in precious metals have come as investors choose havens over risk assets amid financial market turbulence. In the aftermath of the Brexit vote, investors are speculating that further stimulus is likely from the European Central Bank and Bank of Japan, while scaling back the odds that the Federal Reserve will raise U.S. interest rates this year.

Global investor demand for bullion remains strong. Holdings in gold-backed exchange-traded funds rose 6.6 tons to 1,959.1 tons as of Friday, the highest level since August 2013, data compiled by Bloomberg show. Assets in silver ETFs were at 20,044.1 tons, near a record of 20,232.1 tons in June.

–With assistance from Angie Lau. To contact the reporter on this story: Ranjeetha Pakiam in Singapore at rpakiam@bloomberg.net To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Jake Lloyd-Smith

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