Gold and silver prices pared losses on Thursday as a dollar drop sparked a sharp reversal, while uncertainty related to US Federal Reserve's monetary policy and worries about global demand kept prices from rising further.
Silver fell 3 percent, sharply off early session lows after the Shanghai Gold Exchange lifted its margin requirements for the metal, which lost nearly 30 percent last week after successive US futures margin increases and as investors dumped silver exchange traded funds.
Gold prices were little changed. Silver fell 2.8 percent to $34.08 an ounce by 3:34 pm EDT (1934 GMT). COMEX futures trading activity was active, 70 percent above its 30-day average, consistent with stronger volume during last week's sell-off. Spot silver sharply bounced off a session low of $32.33, as the metal appeared to find support at its 150-day moving average at $32 an ounce.
Spot gold was up 0.1 percent at $1,501.04 an ounce. US June gold futures settled up $5.40 at $1,506.80 an ounce, after trading in a range from $1,477.60 to $1,509.70. Gold dropped more than 1 percent on Wednesday and silver nearly 9 percent as hefty gains in the dollar prompted selling across commodities.