US MIDDAY: silver, gold down

Silver was on course for its largest one-day fall in six weeks on Tuesday after having hit a 31-year high in the previous session, while gold was pressured by investor uncertainty over the likely course of US monetary policy. Spot silver fell by as much as 4.9 percent to a session low of $44.63 an ounce, after having risen to $49.31 on Monday, its highest since touching $49.48 in January 1980.
High volatility and the expiry of US silver options added to the intensity of the decline, impacting gold, which fell back from Monday's record of $1,518.10 an ounce ahead of the outcome of the two-day US Federal Reserve policy meeting on Wednesday.
The Fed is expected to indicate that it is in no hurry to raise interest rates, while Chairman Ben Bernanke will deliver the first regularly scheduled post-decision news briefing in the bank's 97-year history. "We are seeing investors taking profits on the metal after this incredible run-up which was fuelled largely by speculators," said TD Ameritrade chief derivatives strategist Joe Kinahan.
Silver was last bid at $44.92 an ounce at 2:16 pm EDT (1816 GMT), compared with $46.90 late in New York on Monday, set for its biggest daily percentage loss since March 15. Silver at-the-money implied options volatility has risen by over 35 percent in the last four trading days to hit its highest level since mid-November.
US silver futures saw record volume on Monday, with over 300,000 lots changing hands, with another 162,818 trading by 2:16 pm on Tuesday. Silver futures for May were down at $45.00 having closed at $47.149 on Monday. The iShares Silver Trust, the world's largest silver-backed exchange-traded fund, also saw heavy trading, with a record 34.93 million shares trading on Monday and a further 17.5 million shares changing hands before 2:00 pm EDT on Tuesday.
The spot price was last down 0.4 percent at $1,502.55 an ounce, while US gold futures for June delivery were down 0.4 percent at $1,503.10. Silver prices are still up about 50 percent so far this year after gains of more than 80 percent last year. Platinum was last at $1,803.48 an ounce, down from Monday's last quote at $1,819.30, while palladium traded at $750.00 an ounce versus $757.80 on Monday.