By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Silver futures continued their sharp decline Friday following a rout for many commodities in the previous session, while gold futures stabilized in European trading.
Gold futures GCM11 +0.24% edged up 30 cents to $1,481.90 an ounce in electronic trading on Friday, after losing 2.2%, or $33.90, on Thursday in the biggest one-day percentage drop for the precious metal since mid-March.
The dollar held broadly steady ahead of a key U.S. jobs report due out later in the global trading day. The greenback had surged on Thursday amid the slump in commodity prices. Read more on dollar.
Silver futures SIN11 -4.19% extended their losses Friday, with the July contract dropping $1.54, or 4.3%, to $34.70 an ounce.
Silver put in an even worse performance than gold on Thursday, tumbling $3.15, or 8%, in the biggest one-day percentage drop for the metal since Dec. 1, 2008.
The losses have coincided with increased margin requirements. CME Group Inc., the owner of Comex and Nymex, late Wednesday announced two additional margin-requirement increases, effective at the end of close Thursday and Monday.
“Fund liquidation and a series of margin increases [are] hitting the market hard,” said analysts at MF Global.
Gold and silver prices both surged in recent months amid geopolitical turmoil, and as many developing market countries raised interest rates to combat inflation.
“There are two lessons that can be learned. The first is that markets fall much faster and harder than they do going up, while secondly, the bigger selloffs are not necessarily triggered by any one headline, but rather a culmination of events that finally come together to burst the bubble in question, and usually at the most unexpected time,” said the MF Global analysts.
Other commodities also continued to fall Friday. Light crude for June deliver CLM11 -1.85% dropped $2.95 to $96.85 in electronic trading on the Globex market.
