Silver futures are poised to endure their worst week since the mid 1970s, Bloomberg reports.
One week ago, silver futures were just short of $50 per troy ounce and on the brink of pushing beyond the record price of $50.35 per troy ounce, which was set in January 1980. And one analyst did not rule out the downward spiral continuing.
"The higher cash-margin requirements simply cannot be met by all participants, and when a trader can't make margin, the underlying security is often liquidated," according to a note from Lachlan Shaw, a commodity analyst at Commonwealth Bank of Australia. "Further silver price falls are possible."
At 11:48 a.m. on Friday, silver futures were down 0.57 percent, a 0.205 dip to $36.035 per troy ounce.
Silver's travels are representative of a larger slump in commodities, which has spurred investors to sell precious metals. Since notching 31-year highs of $49.845 on April 25, silver futures have lost 30 percent of their value. Thus far this week, the precious metal has dropped 28 percent.
When silver futures notched record highs of $50.35 in January 1980, the next four months saw the precious metal plunge in value to less than $11 per troy ounce.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
