At any rate, last night, one market strategist was quoted as saying that “We’ve done a lot of chart damage these last two days, especially today. Yesterday and in prior sessions, we were bouncing off of the 100-day moving average, which is in the $1,700 area. Today, we plowed through the 100-day, 50-day and 200-day [moving averages].” Silver fell out of bed once again and lost more than $1 on the session, to settle at $32.95 the ounce on the bid-side after having touched lows under the $32.50 level.
The noble metals complex got hit quite hard as well on Tuesday, with platinum falling $50 to $1,611 and with palladium leading the losses in the precious metals niche with a 5.5% drop to $665.00 per ounce. PGMs fell right in line with the broader markets and the euro, although their losses were particularly pronounced following the news of a restart of production at Impala Platinum.
That news, combined with the downbeat Sino-European economic jitters proved quite damaging to prices. Carmakers are apparently bracing for a more pronounced decline in European auto deliveries with some of them forecasting a potential 5% fall-off in sales this year; the fifth such annual contraction in a row. This is just one of the effects of the European financial crisis in action but some local auto executives are optimistic that a turn-around might come as early as the end of this quarter.
The recent string of signs that the global economy –with the possible exception of the US and a few other isolated instance- is slowing finally caught up with the markets on Tuesday. Commodities experienced their largest decline of the year-to-date after the realization that China and Europe are both experiencing economic difficulties and will thereby demand less “stuff” sank into the minds (and the computer sell-programs) of the speculative crowd.
Just one week prior to the sell-off the same space was as crowded as a Tokyo subway with bullish bettors – the highest number of them since September of 2011. Commodity analyst Edward Meir noted that the “impetus, the momentum, is [now] damaged for commodities” and he expects them to decline 10% from their recent highs by April. To say that sentiment has shifted 180 degree in one week is to state the obvious.