Investing.com – Last week saw gold prices decline for the first time in seven weeks, while silver suffered its worst weekly decline since 1980 after a series of increases in Comex margin requirements sparked a massive selloff in commodities.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery settled at USD1,495.45 a troy ounce by close of trade on Friday, dropping 4% over the week.
Meanwhile, silver futures for delivery in July settled at USD35.61 a troy ounce by close of trade Friday, plummeting 25.9% over the week, wiping out gains from the previous three weeks that took prices to a 31-year peak just below USD50 on April 25.
The CME Group, operator of the Comex raised the amount of cash that traders must deposit for speculative positions by 84% in the past two weeks, including three times in the past week alone.
The CME announced on Thursday that it increased the so-called initial margin to USD21,600 per contract, after raising it to USD16,200 per contract on Tuesday, pushing small investors out of the silver market. Margins were USD4,250 a year ago.
Silver prices were also pressured after the Wall Street Journal reported that multibillionaire hedge fund manager George Soros has been selling his silver holdings, after significant buying of the precious metals for the past two years.
Meanwhile, gold prices rebounded from a three-week low on Friday, jumping 1.3% after Germany’s Spiegel magazine reported that Greece may withdraw from the euro zone, boosting the appeal of the metal as a hedge against economic uncertainty. Greece later denied the report.
Gold also bounced as jewelers, physical buyers and bargain hunters, especially in Asia, took advantage of lower prices.
On Thursday gold prices fell sharply as the U.S. dollar strengthened after European Central Bank President Jean-Claude Trichet indicated that the central bank may not raise interest rates in June.
The dollar index jumped 2.6% on the week to settle at 75.16 on Friday, the highest since April 19. Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.
On Monday, gold futures retreated from a record high after reports that al-Qaeda leader Osama bin Laden had been killed by U.S. forces in Pakistan sparked a broad-based selloff in commodities.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery settled at USD1,495.45 a troy ounce by close of trade on Friday, dropping 4% over the week.
Meanwhile, silver futures for delivery in July settled at USD35.61 a troy ounce by close of trade Friday, plummeting 25.9% over the week, wiping out gains from the previous three weeks that took prices to a 31-year peak just below USD50 on April 25.
The CME Group, operator of the Comex raised the amount of cash that traders must deposit for speculative positions by 84% in the past two weeks, including three times in the past week alone.
The CME announced on Thursday that it increased the so-called initial margin to USD21,600 per contract, after raising it to USD16,200 per contract on Tuesday, pushing small investors out of the silver market. Margins were USD4,250 a year ago.
Silver prices were also pressured after the Wall Street Journal reported that multibillionaire hedge fund manager George Soros has been selling his silver holdings, after significant buying of the precious metals for the past two years.
Meanwhile, gold prices rebounded from a three-week low on Friday, jumping 1.3% after Germany’s Spiegel magazine reported that Greece may withdraw from the euro zone, boosting the appeal of the metal as a hedge against economic uncertainty. Greece later denied the report.
Gold also bounced as jewelers, physical buyers and bargain hunters, especially in Asia, took advantage of lower prices.
On Thursday gold prices fell sharply as the U.S. dollar strengthened after European Central Bank President Jean-Claude Trichet indicated that the central bank may not raise interest rates in June.
The dollar index jumped 2.6% on the week to settle at 75.16 on Friday, the highest since April 19. Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.
On Monday, gold futures retreated from a record high after reports that al-Qaeda leader Osama bin Laden had been killed by U.S. forces in Pakistan sparked a broad-based selloff in commodities.