Silver futures slipped as much as 5.4 percent while copper futures dropped 2.5 percent as the Federal Reserve prepares to kick off two days of meetings. The central bank is expected to announce on Wednesday that the second round of quantitative easing, a program known as QEII that aims to spur the moribund economy, will come to a close in June.
"There's uncertainty from the U.S. monetary policy," Dominic Schnider, an analyst at UBS in Singapore, told Bloomberg. "Keep in mind that it has been the QEII that pushed commodity prices."
Concerns about rising credit risks in China prompted the nation's banking regulator to establish capital targets for the five largest lenders in the country. China already is attempting to reduce loan growth and minimize inflation risks.
"Market sentiment has been dented all around by the ongoing efforts of the Chinese government to rein in liquidity and cool the economy," Shi Hai, an analyst at Shanghai Tonglian Futures, told the news service.
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