By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Following a rout for many commodities in the previous session, gold futures stabilized a bit in Asian trading on Friday but silver futures fell further.
Gold futures GCM11 +0.34% were up $4.00 at $1,485.40 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, which often trades inversely to commodity prices, pulled back a touch on Friday ahead of a key U.S. jobs report due out later in the global trading day. Read more on dollar
However, silver SIN11 -3.28% dropped another $1.28, or 3.5%, to $34.96 an ounce on Friday.
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 is 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 sell-offs 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.
