US silver futures plummeted 3.1 percent to trade below $10 an ounce early Wednesday and gold likewise fell sharply as investment funds ditched positions in the technically overbought metals.
Positions got trimmed back for a third straight session amid a steady US dollar, expectations of more interest rate increases, and softer crude oil prices, in addition to broad-based liquidation in the commodities complex overall.
Silver has lost 6.5 percent in value since last week's rally in the metals while gold has shed 4 percent since it recently failed to retest its 25-year highs from February.
"Selling hit us right at the open and all commodities are experiencing a correction," said Paul McLeod, vice president of precious metals at Commerzbank in New York.
Silver for May delivery was down 31.7 cents at $9.79 an ounce by 9:51 am EST (1452 GMT) on the New York Mercantile Exchange's COMEX division, dealing from $10.12 to an eight-day low of $9.67.
The gray metal plunged after the market had looked overbought after Friday's rise to a 22-year peak of $10.33 on anticipation of the US Securities and Exchange Commission ruling soon on a US silver-backed security. Spot silver fetched $9.77/9.80 an ounce, down from Tuesday's close at $10.08/11. Wednesday's fix was at $9.95.
Overall commodities weakness also weighed on the metals, traders said. The Reuters/Jefferies CRB Index of 19 commodity futures fell to its low for 2006 at 318.58 on Wednesday.
Benchmark April gold dropped $9.20 or 1.7 percent to $545.30 an ounce, after slipping below key chart support at $550. Its early range ran from $555.40 to a three-week low at $543.50.
Benchmark COMEX gold hit a 25-year peak at $579.50 on February 2 before it subsequently corrected down to as low as $537.80. Spot gold was last at $544.75/545.50, off from $551.90/2.80 previously. The afternoon daily spot reference rate was fixed in London at $544.75.
Meanwhile, NYMEX April platinum fell $30.90 or 3 percent to $1,010 an ounce. Spot reached $1,008/1012. June palladium sank $11.25 or 3.8 percent to $281.50 an ounce. Spot palladium hit $278/282 an ounce.
Comments
Comments are closed.