After a ferocious run this week, the broad precious metals group dropped, and silver saw its largest decline in six months, falling more than 6%.The decline occurred as worries about US credit quality and trade tensions with China, which are hurting demand for gold and silver as safe havens, subsided.

While strong regional bank results helped stabilise the stock market and raise bond yields, President Donald Trump's comments on Friday reduced concerns about trade tensions. Higher rates are generally bad for bullion because it doesn't pay interest.

Additionally, a historic squeeze in London's silver market is beginning to ease, which has caused some investors to take profits.
According to Nicky Shiels, head of metals strategy at MKS Pamp SA, "the London shortage is somewhat alleviating from extreme levels and the more regional dislocations smooth out, there could be pressure and profit-taking."This week, silver reached new all-time highs, closing Friday near $54.50 an ounce before plunging in a rally that seemed to have ended too quickly. A relative strength index, a measure of price momentum, indicates that too many people have been purchasing silver since late September, which could lead to a price decline. Gold is in a comparable circumstance.Still, central bank purchases and inflows into bullion-backed exchange-traded funds have supported gold's more than 60% increase this year.
The London silver market has tightened significantly over the past two weeks, pushing prices significantly above New York silver futures and forcing traders to ship metal across the Atlantic. With its one-month annualised borrowing costs hovering around 20% on Friday, the record squeeze in London set off a global quest for the metal.

More than 15 million ounces of silver have been taken out of facilities connected to the New York-based Comex futures exchange in the last week. Along with a significant 10 million ounce withdrawal from silver-backed ETFs on Thursday, a large portion of that is probably going to London, where it should assist reduce tightness.

Although it is significantly smaller than the $3 spread from last week, the price differential between the two trading hubs is still quite large at more than $1.10 an ounce.

As of 2:38 p.m. in New York, spot silver was down 4.4% to $51.88 an ounce. While palladium and platinum also declined, spot gold lost 1.9%.