Gold Falls, Silver Plummets for Second Day


Fine Gold BarsGold futures dropped 1.1 percent Tuesday, ending a streak of four record settlements. Silver prices continued to tumble, falling 7.6 percent on the day and 12.4 percent since Friday.

June gold prices ended down $16.70 to $1,540.40 an ounce on the Comex in New York. Gold ranged between $1,516.20 and $1,551.40.

"We are seeing accelerated margin selling in silver … and it’s spilling over into gold and crude oil. When you have big margin selling in one commodity, it has a cascading impact on the markets," Bill O’Neill, partner of New Jersey-based commodity investment firm LOGIC Advisors, was quoted on Reuters.

Silver prices for July delivery fell $3.499 to close at $42.585 an ounce. The metal traded between $40.60 and $45.600. CME Group Inc., which operates the Nymex, has raised trading margin requirements for the metal three times in a week.

"The focus in the marketplace remains almost entirely concentrated on silver and the silver bubble’s developing story. The CME hiked the margin requirements for silver speculation for the third time in a week, noted Jon Nadler, Senior Analyst at Kitco Metals Inc.

"A number of small players were likely driven out of the market by the successive CME margin hikes, albeit not every analyst regards the participatory requirement changes as having necessarily been the catalyst for the $7, virtually insta-plunge in the value of the white metal, since it touched fresh records but failed to close above the psychological round figure."

Platinum prices for July delivery lost $15.20, or 0.8 percent, to settle at $1,860.50 an ounce. Platinum ranged between $1,845.40 and $1,872.00.

Palladium prices for June delivery declined $1.70, or 0.2 percent, to $782.40 an ounce. Palladium traded between $763.10 and $791.50.

London precious metals prices were mixed when comparing their PM fixings on Tuesday from those on Thursday, the last time the UK markets were open. The PM gold fix added $4.75 at $1,540.25 an ounce. Silver declined $5.090 at $43.610 an ounce. Platinum rose $23.00 at $1,858.00. Palladium lost $2.00 at $775.00.

Three of four Gold Eagle bullion coins advanced Tuesday while other United States Mint bullion products remained unchanged. The following sales figures as published by the Mint highlight daily, May and year-to-date bullion gains.

US Mint 2011 Bullion Coin Sales
American Eagle Gold Coin (1 oz) 2,500 13,500 371,500
American Eagle Gold Coin (1/2 oz) 4,000 10,000 43,000
American Eagle Gold Coin (1/4 oz) 0 2,000 54,000
American Eagle Gold Coin (1/10 oz) 5,000 5,000 205,000
American Buffalo Gold Coin (1 oz) 0 2,000 60,500
American Eagle Silver (1 oz) 0 654,000 15,902,000
2011 ATB Silver Bullion Coins (5 oz) 0 12,400 237,800
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