Silver slipped sharply from an 11-month peak on Thursday as a rebound in the dollar prompted traders to cash in earlier gains, while gold also fell from a five-week high hit after comments from the European Central Bank drove the euro higher. The single currency jumped as much as 1 percent against the dollar after ECB chief Mario Draghi said the bank's policies are working to stimulate economic recovery. However, it failed to maintain those gains, sparking a retracement across precious metals.
Silver was down 0.2 percent at $16.92 an ounce by 1410 GMT, off a peak of $17.70, its highest since May. Gold was up 0.7 percent at $1,251.56, but was well down from an earlier high of $1,270.10.
While the metals were struggling to maintain their early rally, positive sentiment for commodities in general, as well as rising speculative interest, are underpinning gold and silver, Commerzbank analyst Carsten Fritsch said.
"I see some correction potential in the short term after strong gains in recent days and weeks," he said. "(But) not much, I think - the general environment is still positive for gold and silver."
Silver is on track for its biggest weekly rise since January 2015 after a break of key chart resistance last week sparked a wave of buying.
It reached its most expensive versus gold in six months on Thursday, with an ounce of gold buying 72.3 ounces of silver.
"Silver has most certainly been developing its own strong momentum, the way it has rallied and outperformed gold," said Saxo Bank's head of commodities research, Ole Hansen. "Gold has been 'saved' this time round by silver, as demand has slowed."
Holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares, has seen outflows of 14 tonnes so far this week, while silver ETF holdings have surged.
"(Silver) could potentially be running out of steam ahead of the 17.80 high from last year, and that could trigger some profit-taking," Hansen said. "The strength of the market will be determined by whether $16.80 will be strong enough to cap the correction once it starts."
Among other precious metals, spot platinum was up 1.1 percent at $1,026.51 an ounce and spot palladium rose 2 percent to $605.47.
As gold and silver rallied in the wake of Draghi's comments, palladium touched its highest since early November at $615.85 an ounce, while platinum hit a 10-month high of $1,043.72.