The price of silver was oh so close to $50 per troy ounce, just about $0.15 away. And then last week happened. I know that silver is subject to wild swings but losing two weeks of gains in 11 minutes on Monday (5/2) is a bit much. It's one for the silver record books. The worst one-week showing for silver in 30 years. Silver was down four of the five days for that week.
Some say it was time to take profits and that probably had some effect. But the big reason in my mind (and several others) is the Chicago Mercantile Exchange raising the minimum margin requirements on silver futures. Without going into great detail, those traders holding futures contracts in silver had to either cough up lots more money or sell some or all of their contracts. Lots must have sold based on the falling prices. The CME did this four times in a week! Usually this done when prices are rising to cool the market down. They even did this with falling prices.
The good news is whenever this happened in the past, silver prices rebounded later. From the low 30's silver is now rising again. Spot silver is at $39.30 at the time of this post. Some experts are predicting silver will attain $50 per ounce before 2011 is over. In the meantime, this price drop may be a gift for you to pick up some nice silver pieces while it is $10 lower than it was just a few days ago.
Silver American Eagles are being produce in greater volume than in the past few months. For the first 10 days in May, the U.S. Mint reported 1,421,000 which adds up to 16,669,000 for the year. At this rate, May will be a better month for Silver Eagles than April (2,819,000) or March (2,767,000).
Thanks for reading.