This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold, Silver Prices Fall on Commodities Call

NEW YORK ( TheStreet ) -- Gold and silver prices fell Tuesday as fickle trading money rushed for the exit.

Gold for June delivery lost $14.50 to settle at $1,453.60 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,468.50 and as low as $1,445 while the spot gold price was shedding more than $11, according to Kitco's gold index.

Silver prices tanked 54 cents to $40.06 an ounce. Silver had been holding up in early trading despite the fact that Bloomberg reported Monday a $1 million bet by an options trader that the iShares Silver Trust (SLV) would fall 37% by July. Currently 22.6 million shares are sold short. The bearish bet wasn't echoed in the futures market.

According to Anthony Neglia, president of Tower Trading, the metals were getting bullied by Goldman Sachs (GS). The investment firm issued a note Monday urging clients to take profits in commodities as the broad rally might not last as high oil prices eat into demand. All commodities were taking a hit Tuesday, oil prices were down almost $4, especially after mixed earnings from Alcoa (AA).

The heavy selling also triggered sell stops where traders are forced to dump positions to lock in gains. The reverse, buy orders, were pivotal in gold prices reaching record levels last week, but now the hot money is shaking out.

"Open interest [is] still good in gold and silver," says George Gero, senior vice president at RBC Capital Markets. "Previous selling resulted in bargain hunting by gold and silver owners over the longer term as fundamentals have not improved in the Mideast or Euro Zone."

"Silver is the stronger of the two [metals] with investors seeking the investment demand and also the fundamental industrial demand for the silver market," says Phil Streible, senior market strategist at Lind-Waldock. Streible thinks that the gold/silver ratio will rise, which was around 34 on recent highs. A higher ratio would mean that gold prices would catch up to silver's rally or silver prices will cool a bit.

Streible thinks $42 is the short term top for silver and that gold could fall to $1,450 an ounce. Long term, however, $45 for silver and $1,500 for gold are still in the cards.

"If you see things start to deteriorate in the Middle East again," says Streible, "or if you see the shorts start to really scramble ... if earnings start coming in fuzzy ... gold and silver could continue to rally as a safety play."

Scott Redler, chief strategic officer for, who shorted the SLV Monday, is looking to add to his silver short Tuesday, and recommends that long term investors wait for the recent volatility to shake out before getting more heavily invested.

The U.S dollar index was retreating 0.30% to $74.84, but it wasn't enough to bring gold and silver buyers into the market. However, both metals ended up from their session lows.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SLV $16.51 0.12%
AUY $4.49 6.40%
GFI $4.33 2.85%
HMY $3.40 8.28%
NGD $4.37 3.60%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs