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Silver futures plunge as data sparks massive exodus from precious metals

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Shutterstock photo - Silver futures plunged on Monday, down by over 12% and hitting levels not seen since October of 2010 as investors ditched positions in the metal after U.S. and Chinese data sent investors fleeing precious metals for the safety of the dollar.

On the Comex division of the New York Mercantile Exchange, silver futures for May delivery traded at USD23.130 a troy ounce during U.S. afternoon trading, down 12.16% on the day.

Comex silver prices hit a daily low of USD22.935 a troy ounce, the weakest level since late 2010.

Silver prices were likely to find support at USD22.462 a troy ounce, the low from Oct. 7, 2010 and resistance at USD23.668, the high from Oct. 11, 2010.

Precious metals dropped after official data out of Beijing revealed that the Chinese gross domestic product expanded by 7.7% year-on-year in the three months to March, down from 7.9% in the fourth quarter and well below expectations for 8.0% growth.

Chinese industrial production, meanwhile, also failed to meet market expectations.

The Asian giant's industrial production grew 8.9% on-year in March, below market calls for 10.0% growth and also below a 9.9% reading in February.

Chinese retail sales, on the other hand, grew 12.6%, beating market consensus for a 12.5% reading as well as February's 12.3% rate.

Meanwhile in the U.S., the Federal Reserve's Empire State manufacturing index, a key gauge of economic health in New York State, fell to 3.1 in April from 9.2 the previous month, falling far short of market expectations for a decline to 7.0.

The news sparked a global risk-off trading session that punished gold especially hard due to technical factors, which took silver down with it.

Monday's ultra-bearish data came one trading day in wake of disappointing indicators in the U.S.

In the U.S. on Friday, the Thomson Reuters/University of Michigan's preliminary consumer sentiment index dropped to a 9-month low in April, falling to 72.3 from 78.6 in the previous month.

Analysts were expecting the index to tick down to 78.5 this month.

Official data also released Friday revealed that retail sales in the U.S. fell 0.4% in March, defying expectations for a 0.1% rise after a 1% increase the previous month.

Core retail sales, which are stripped of volatile automobile sales, also dipped 0.4% last month after a 1% increase in February, missing similar expectations for a 0.1% rise.

Precious metals plunged on demand for the dollar but also due to talk monetary stimulus programs in place around the world will wind down soon.

The Federal Reserve has said it will keep monetary stimulus measures in place for now, though recent language from the U.S. central bank suggested such programs may begin to unwind later this year, which would support the dollar and tarnish precious metals' appeal as a hedge during loose monetary policies since the 2008 financial crisis. - 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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