Gold and silver are suffering substantial losses on Thursday as dissipating trade tensions contribute to a flight from haven assets.

Gold futures are down more than two per cent, while those on silver are off as much as 3.6 per cent as of 12 p.m. New York Time.

“A large stock of positioning in precious metals has been built up on the long side, driven especially by ETF flows,” said Naufal Sanaullah, chief macro strategist at EIA All Weather Alpha Partners. “Real yields declined on FOMC, but have reversed that bounce and now metals are cracking important technical levels. So we believe precious metals have more downside to come.”

Higher real rates decrease the relative value proposition offered by gold, an asset with no yield that had been benefiting from a rising stock of negative-yielding debt earlier this year, he added.