Gold and silver prices fell sharply on Thursday amid a broad-based sell-off in the market and mounting pressure on precious metals after the dollar rose to its highest level in nearly two weeks, along with signs of easing trade tensions between the United States and China.

Spot gold fell 2.5 percent to 4,838.81 dollars per ounce by 0535 GMT, retreating from a roughly one-week high reached earlier in the session.

US gold futures for April delivery declined 1.9 percent to 4,855.60 dollars per ounce.

Gold (illustrative image)

Tim Waterer, a market analyst at KCM Trade, said: "The dollar rebounded with the nomination of Kevin Warsh as chairman of the Federal Reserve, and the currency managed to continue its rise... traders have now become more cautious about gold in light of the latest sharp volatility."

The dollar index rose to its highest level in nearly two weeks on Thursday, making gold priced in dollars more expensive for holders of other currencies.

Christopher Wong, a strategist at OCBC, said: "Sentiment has weakened across most asset classes, including precious metals, cryptocurrencies and country equities, as losses deepen and create a vicious cycle amid tight liquidity in the market."

Asian stocks fell, tracking their US counterparts, as concerns about the high costs of investment in artificial intelligence weighed on the technology sector.

Spot silver plunged 14.9 percent to 74.94 dollars per ounce. The precious metal had recorded a record high of 121.64 dollars last week.

On the geopolitical front, officials from both sides said that Iran and the United States agreed to hold talks in the Sultanate of Oman tomorrow, Friday. US President Donald Trump said, following talks he described as "very positive" with Chinese President Xi Jinping on Wednesday, that China is considering buying more US-grown soybeans.

Platinum fell 8.7 percent in spot trading to 2,033.35 dollars per ounce after hitting an all-time high of 2,918.80 dollars on January 26. Palladium slipped nearly 5.8 percent to about 1,672 dollar