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, and the higher amounts necessary for gambling in the white metal will become effective as of the close of business tonight. Yesterday, the price of silver fell by more than 8% (and by 13% earlier, ahead of Monday trading) and the price slide extended by an additional 2% during the overnight trading hours in Asia.
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.
According to CFTC-sourced data, the net-long positions in both gold and silver experienced contract shrinkage in the latest reporting period. On the other hand, the recent dip in prices may be helpful in boosting gold sales in India ahead of the May 6 Akshaya Tritiya festival – one of the most auspicious times to buy small pieces of gold and silver.
This morning’s price action started off to the downside in New York. Spot gold traded at $1,544.10 on the bid-side and showed a loss of $1.50 after having traded down to near $1,535.00 during the early hours. Current support in gold is believed to be found near $1,531.00 the ounce. Silver fell 32 cents to start the session off at $43.61 per ounce. Support in the white metal is thought to emerge around the $42.15 area and then not until the roughly $39.50 value zone.
Platinum and palladium opened flat-to-down this morning but turned slightly higher within the first half-hour of trading action. The initial quotes came in at $1,859.00 for the former and at $769.00 for the latter. Rhodium dropped $70 to the $2,130.00 per troy ounce level. While the recent patterns in the noble metals space may be indicative of the fact that speculators are beginning to discard major concerns about the metals in the wake of the Japanese quake in March, the latest in CFTC positioning data does give some reasons for concern.