Silver was as low as $40.58 today coming slightly back to close at $41.72, down $2.27. The white metal was trading as high as $44.34 intra day to make for a stomach churning $3.76 swing.
A main driver behind todays volotility was the changing of silvers margin requirements for the third time in seven days by the CME. The changes went in to effect at the close of business today. You can see the official CME advisory notice here;
The CME also raised silver margin requirements on April 29th, 2011 in addition to the first silver margin hike of this recent series.
April 29th’s advisory can be found on page 4 of the advisory notice here;
There was alot of money made and lost today in the growing silver trade. As we have mentioned recently, the volatility in silver is getting rough. The swings are getting greater and greater as we have risen and descended from a high of $49.80 to $40 in less than 30 days. It will continue from this point, and may increase.
$50 silver is still in the target as the American debt ceiling must be raised to avoid a debt default by the US. Tim Geithner bought capitol hill some more time informing them that they have three more weeks to get this figured out until August 2nd.
Read the bloomberg report here;
In spite of the events and distractions of the last two weeks, from the holiday weekend and a royal wedding to the bin laden episode, the U.S. financial situation has not improved, and allowing the printing presses to run some more money off again will not be good for the value of the US $, but will cause precious metals to consolidate and increase. To say this correction is healthy may not be the best way to describe it, but it was necessary to insure an overcoming of the 1980 high around $50. Keep in mind, people waited years for $40 silver, and we are still holding just above that level.
Bargain hunter’s can now come off of the sidelines with confidence, just make sure you are investing with the right program which will allow you to survive and prosper in the coming silver swings.