Spot silver prices slid for the fifth straight day Thursday to the lowest in a month, while the euro secured gains against the dollar Thursday before the European Central Bank meeting where it is expected to reinforce its hawkish outlook.

The precious metal's 20 percent slide from a record high near $50 an ounce hit last Thursday rippled into other markets such as crude oil and the Australian dollar, encouraging investors to take profits after a recent rally.

But some scattered short-covering by traders before the ECB meeting pulled some markets off lows with the Aussie advancing versus the yen and silver from the day's lows.

The pull-back in commodities this week pushed Asian shares outside Japan down for the third consecutive day, moving further away from a three-year high tested last week, even as commodities trading giant Glencore readied for a blockbuster IPO in London and Hong Kong.

Japanese markets are shut for a holiday.

Notwithstanding this week's softness in global equities, partially fueled by some soft U.S. economic data, markets have been broadly steady after posting big gains last quarter.

This is more of a consolidation phase and we are likely to see low double-digit returns this year after a recent nice run up, said Binay Chandgothia, portfolio manager at Principal Global Investors in Hong Kong. The firm manages more than $200 billion in assets worldwide.

Reflecting that caution in credit markets, spreads on the benchmark iTraxx investment grade index for Asia ex-Japan widened slightly to 106/108 basis points after narrowing sharply in recent weeks.

COMMODITIES RETREAT

The Reuters-Jefferies CRB index <.CRB>, a global benchmark for commodities, fell nearly 2 percent Wednesday, hit by the sell-off in silver and declines in coffee, sugar and cocoa.

Until this week's retreat, commodities have been the best performing asset class in the first four months of this year, up more than 13 percent.

Copper extended losses briefly Thursday, with London futures dropping to seven-week lows as concerns grew that Asian economies would probably sacrifice some growth in exchange for keeping inflation under check, reducing demand.

India lifted interest rates by an aggressive half point this week while a Reuters poll of economists marked down 2011 growth forecasts for India and Australia.

HAWKISH ECB

In the currency markets, the euro hovered near a 17-month high against a struggling dollar Thursday ahead of the ECB meeting, while the dollar index <.DXY> hit its sixth three-year low in the last seven sessions, but managed to rebound from the trough.

The numbers raised worries that Friday's crucial non-farm payrolls report will disappoint and prompted the euro to consolidate its gains near a 17-month high against the dollar as markets braced for more hawkish comments from the ECB.

The ECB is expected to signal its readiness to raise interest rates when it meets Thursday and may use its 'strong vigilance' code words to signal a rise as soon as June.

It raised euro zone rates by a quarter of a percentage point to 1.25 percent last month, ending almost two years of record-low interest rates and beginning what economists expect to be a run of increases.

Positioning is light going into the ECB and talk of double-no-touch 1.4750/1.4950 in options market may contain the range. But I expect the ECB to keep the 'strong vigilance' wording, a trader at a U.S. investment bank said.

In contrast, top Federal Reserve officials said on Wednesday U.S. inflation remained well under control, reaffirming the view that the Fed will keep policy ultra loose.

That sent U.S. Treasury yields to their lowest levels since mid-March, with the 10-year yield falling to 3.23 percent, down nearly 40 basis points down in less then a month.

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