Silver futures fell most since 2008 on increased margin money

Posted By: Religare
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Silver futures fell most since 2008
Silver futures plunged on Monday in the domestic bullion market due to following weak global cues. At Commodity Exchange (COMEX), silver for July contract fell as much as 13.16 per cent to US$42.200 an ounce, the biggest intra-day decline since October 2008, as Chicago Mercantile Exchange (CME) Group, Inc. increased the initial margin money by 13 per cent to US$14,513 per contract from US$12,825.

The initial margin money is the amount of cash that traders need to deposit with exchange for speculative positions. Increased margin money forced investors to reduce their positions, resulted a downward pressure created on silver futures prices.

Silver for May contract, at MCX, closed at Rs. 67,856.00 (down by 3.76 per cent) after opening at Rs. 70,000.00 against the previous closing of Rs. 70,507.00. It touched the intra-day low of Rs. 64,221.00 with a business volume of 5,960 lots.

At COMEX, silver for July contract closed at US$46.084 per ounce, down by 5.17 per cent, after opening at US$48.090 against the previous closing price of US$48.599 per ounce. It touched the intra-day low of US$42.200 with a business volume of 95,219 lots.

Hedge fund managers and other large speculators cut their long positions by 26 per cent in New York silver futures in the week ended April 26, according to the U.S. Commodity Futures Trading Commission report.

Read more about: silver, comex, investment
Story first published: Tuesday, May 3, 2011, 12:30 [IST]
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