Silver Plunges Most Since 2008 on Higher Margins; Gold Advances to Record

Silver futures plunged the most since January as exchange owner CME Group Inc. raised the cash deposit required for trading after prices reached a 31-year high last week. Gold extended its rally to a record. Margins for speculative positions on the CME’s Comex exchange in New York rose 13 percent to $14,513 per silver contract after the close of business on April 29. Margins were $4,250 a year earlier. Prices gained 28 percent in April, the largest monthly gain since January 1983, as investors bought precious metals as an alternative to a falling dollar. Gold reached a record $1,577.40 an ounce today on the Comex. “Silver just got out of control on the upside, and it was only a matter of time before it came down,” said Matt Zeman, a strategist at Kingsview Financial in Chicago. “The higher margins are going to squeeze out the little guys. We’ll see the spread between silver and gold close and a little more buying in gold.” “Gold is now a currency,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. “It will supplant the yen as the third-most-important reservable currency amongst the industrialized world’s central banks.”

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