Fading inflation fears, improved Asian economic data and Japan’s economic stimulus measures that have pulled gold prices down by 20 percent since the start of the year – with nearly half of that decline in the past three weeks – are now also putting downward pressure on silver, which hit its lowest price since September 2010.
The price of silver lost 9 percent early in Asia on Monday, before rebounding to hold at a nearly 4 percent decline from Friday’s close. Gold fell 1.2 percent to $1,344 per ounce and is down nearly 9 percent since the start of the month. It lost 1.6 percent on Friday.
Part of Monday’s precious metal price erosion was due to a silver-selloff to cover bets on the yen, which strengthened on Monday following comments by Economy Minister Akira Amari, who warned that the Japanese currency shouldn’t decline much further because it would harm the economy.
"The slump of silver is mainly due to fund outflows from precious metals to yen as some investors are betting on an upturn of the Japanese currency as well as (a) continued rally in the equities market in Japan," Hong Kong based gold trader Yu Kam-Wing told Dow Jones Newswires. Gold is also being hit by falling demand in India – a major buyer – as the wedding season has ended and retail customers see a continued correction to bullion on the horizon, reported the Economic Times.
Angelo Young is a general assignment business reporter who joined IBTimes in April 2012. Much of his career has been behind the scenes as a copy editor, assignment editor and...