By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) – Gold and silver retreated in Asian trade on Tuesday, with gold slipping below the $1,500 level, while silver briefly plunged more than 5%.
Silver for May delivery SIK11 -2.23% fell 4.4%, or $2.09 per troy ounce, to $45.06. In Monday’s session on Comex division of the New York Mercantile Exchange the metal touched a high of $49.82 an ounce and ended at $47.149 an ounce, a rise of $1.09, or 2.4%.
Silver futures gained 8.2% last week, their largest weekly gain since early December.
Gold for June delivery GCM11 -0.32% fell 0.8% in Asia, or $12.00 to $1497.00 per ounce. In Monday’s U.S. session, the contract hit an intra day record of $1,519.20 an ounce and closed at a record $1,509.10.
That was gold’s sixth consecutive high-water mark and its eighth straight day of gains.
Traders awaited a policy announcement from the U.S. Federal Reserve later this week as well as comments from the Fed chief Ben Bernanke for clues as to whether the central bank will end its Treasury-buying program, in June with the scheduled end of the current program — its second round of quantitative easing, or QE2.
“The market is thinking that QE3 will not be there and the people are squaring off positions ahead of that,” said ScotiaMocatta Managing Director Sunil Kashyap, in Hong Kong, referring to the trading activity in the precious metals trading.
He added market activity since Monday could have been distorted by thin trading due to a four-day close of London markets for the Easter holiday on Friday and Monday.
Traders’ reaction when London markets open later Tuesday should give a better snapshot of whether silver remains well-supported near its three-decade high.
