Silver tumbles in Asian trading after six-week surge
The silver market's infamous volatility was on display in early Asian trading Monday, as futures prices plunged more than 13% as markets opened.
Near-term futures on the electronic Globex market sank as low as $42.20 an ounce, down $6.38, or 13.1%, from Friday's closing price of $48.58 an ounce in New York.
There was no apparent trigger for the sell-off, other than profit-taking after last week's price surge. Silver soared 5.5% last week to a 31-year high, the sixth straight weekly advance. The price has jumped from $31 at the start of the year.
By 5:45 p.m. PDT, about two hours into Asian trading Monday, silver had rebounded to $45.22 an ounce.
Silver and gold have been major beneficiaries of the dollar's weakness. The greenback's slide this year against other major currencies has driven some investors into precious metals as a way to hedge against declining purchasing power.
Fear of inflation, as the Federal Reserve maintains its easy-money policy, also has bolstered demand for the metals.
But silver's spectacular streak this year has brought warnings that prices could come crashing down in a hurry, particularly if the dollar were to strengthen.
The dollar, however, continued to weaken early Monday against the euro, the yen, the Australian dollar and other key currencies.
Gold was modestly lower in Asian futures trading, down $2.40 to $1,553.60 an ounce, after reaching a record high of $1,556 in New York on Friday.
The yellow metal typically is much less volatile than silver. Through Friday gold was up 9.5% year to date to silver's 57% gain.
-- Tom Petruno