On Thursday, the precious metals market witnessed a flash crash, where gold and silver lost between three to ten percent in just a few minutes. The immediate cause of this dramatic shift was attributed to the strengthening of the dollar, alongside large-scale profit-taking by investors. This sudden market movement took many by surprise, as gold fell approximately 3.5 percent, breaking the psychological barrier of $5,000 per ounce, a level the market had previously defended after recent highs.

The silver prices saw an even steeper decline, nearly plummeting by ten percent and sliding below the critical reference point of $76 per ounce, which had been a key benchmark for investors following weeks of significant upward movement. According to Diego Albuja, a market analyst at ATFX, the decline in precious metal prices was primarily driven by strong economic data from the United States, diminishing the urgency for potential interest rate cuts, and thereby bolstering the dollar's position.

This interaction between stronger economic indicators, exchange rates, and precious metal prices illustrates the complex dynamics of investment markets, where even minor fluctuations in the dollar's strength can lead to major financial repercussions for commodities. The rapid price changes highlight the volatility in the precious metals market and serve as a reminder of how macroeconomic factors can substantially influence investor behavior and market stability.