Silver Prices Drag As Commodities Stabilize
After reaching even higher record highs last month together with gold, the prices of silver went down as basic commodities recovered from their recent price fever.
Recently, silver values went down 17 percent within only 24 hours, dropping by 35 percent from the all-time high price it reached two weeks ago.
Traders say that the market volatility was driven by their concerns about the weakness of the US and European recoveries, as well as the unwinding of heavy bets on prices by market speculators.
At the start of recovery, investors’ interest in silver declined as evidenced by massive withdrawals of silver exchange-traded funds during the same instance.
Last year, Silver was on the forefront during the commodities’ rally because many speculators saw it as a cheaper alternative to gold.
But today, silver is starting to be shadowed on the backline as people side back to the commodity bubble burst.
Aside from silver, prices of other raw materials also fell, particularly those of industrial metals such as lead, copper and tin, which were all down by another 2-3 percent by mid-afternoon trading in Europe on Thursday, May 12, 2011.
Oil prices also fell, with US light, sweet crude dropping by another 4.5 percent before bouncing back from a 5 percent fall on Wednesday, May 11, 2011. Of all the fluctuations, the price of oil has attracted the most political attention because many people are blaming speculators for its previous rally.
In fact, Exxon head Rex Tillerson told the US Senate finance committee yesterday, May 12, 2011, that oil prices should only be about $60-$70 based on the actual cost of production because market speculators were the ones responsible for the previous price difference.