Silver plunges more than 5% to hit lowest since September 2010

A A A - Silver futures fell sharply on Monday, trading at the lowest level since September 2010 as a weak technical outlook continued to weigh on the precious metal.

Market talk of an unidentified investor selling off a big chunk of silver holdings during illiquid early Asian hours also weighed and likely exacerbated the sharp move lower.

On the Comex division of the New York Mercantile Exchange, silver futures for July delivery traded at USD21.38 a troy ounce during European morning trade, down 4.3% on the day.

Comex silver prices fell by as much as 9.5% earlier in the day to hit a session low of USD20.21 a troy ounce, the weakest level since September 14, 2010.

Silver prices were likely to find support at USD20.00 a troy ounce, the low from September 14, 2010 and resistance at USD22.87, October 5's high.

According to some market participants, silver's plunge was triggered by a sudden move higher in the yen during early Asian trading hours.

The yen found support after Japan's Economy Minister Akira Amari indicated that the yen's correction from excessive strength was almost over and said that further yen weakness could have a negative impact on Japan's economy.

The move lower in USD/JPY prompted a major investor to liquidate a major stake in silver futures to cover positions on the yen.

Silver prices were also under pressure as investors continued to speculate over an earlier-than-expected end to the Federal Reserve's quantitative easing program amid indications of an improving U.S. economic outlook.

Silver traders are now looking ahead to Wednesday's Federal Reserve minutes, for further hints regarding the central bank's monetary policy.

Elsewhere on the Comex, gold for June delivery lost 1.1% to trade at USD1,350.55 a troy ounce, while copper for July delivery fell 1.1% to trade at USD3.287 a pound. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.
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This article appears in: Investing , Forex and Currencies

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