No Love for Precious Metals—Silver Gets Slammed

by Ansuya Harjani, CNBC  |  published on May 20, 2013

First it was gold, and now it’s silver.

The metal fell victim to heavy selling on Monday, dragging gold down with it, on U.S. dollar strength and as investors turned more cautious on precious metals as an alternate investment, said experts.

“We feel silver weakness has been a liquidation trade as investors grow increasingly wary of precious metals and traders are forced to close positions to meet margin calls elsewhere,” said Stan Shamu, strategist at trading firm IG Markets.

Silver slumped over 4 percent on Monday to $21.30 an ounce, leading gold down lower by 1 percent to $1,344 an ounce. At one point silver hit a low of $20.30, down 8.8 percent from the start of trade on Monday.

Shamu is not ruling out further downside for the precious metal, noting that he sees support at $20, a key psychological barrier for investors.

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