A 5-percent tumble in silver on Wednesday marked its biggest three-day loss in five years, and dragged gold down, as speculators continued to dump long positions after margins requirements were hiked early this week. Silver has now lost 20 percent, the conventional criteria for a bear market, since it rallied to a record high near $50 an ounce last Thursday. Gold also notched its worst three-day decline since January despite a broad dollar drop and a ramping up of gold reserves by Mexico.
Spot silver dropped 4.9 percent to $39.58 an ounce by 3:17 pm EDT (1917 GMT), having earlier hit a near one-month low at $38.95. Silver's decline sent the gold/silver ratio to a three-week high near 40 from just below 32 last Thursday. Spot gold was down 1.6 percent at $1,515.30 an ounce, having hit a record $1,575.79 on Monday.
COMEX June gold futures settled down $25.10, 1.6 percent, at $1,515.30. Gold futures volume topped 230,000 lots, one-third above its 250-day average. Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust, fell 0.4 percent from Monday to Tuesday, while the largest silver-backed ETF, New York's iShares Silver Trust, fell about 1 percent. Platinum fell 1.8 percent to $1,819.74 an ounce, while palladium fell more than 5 percent to $742.05.
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