Gold for June delivery added $5.30 to settle at $1,509.10 an ounce at the Comex division of the New York Mercantile Exchange. Gold was backing off from its recent record of $1,519.20. Physical buying rose slightly with the spot gold price adding $6, according to Kitco's gold index.
Silver prices had been close to conquering their record high of $50 an ounce Monday, adding more than $3 to $49.82 an ounce. This 6% plus daily move for silver was sizable, and silver couldn't hold it. The metal settled up $1.09 to $47.14 an ounce.
Silver has been particularly volatile Monday. As the metal approached $50, buy orders were triggered where traders automatically bought silver at a pre-determined price, but the steep move also ignited profit taking. Also adding to silver's volatility were those traders betting against the metal's recent rally.
Scott Redler, chief strategic officer at T3Live.com started shorting silver last week, "I am still net short and I [was] getting hurt into this parabolic move ... do not get excited and buy into silver." Redler trades the iShares Silver Trust (SLV) which added 106 tons last week as investor demand ballooned, and added to his short position at the open.
Silver could also be experiencing a knee-jerk reaction as the metal almost touched $50. "The first time around is always great to get short because you can stop yourself out," says Mihir Dange, trader at Arbitrage. "I am looking for a pullback before silver attempts to make another high." A similar pattern could emerge if silver makes a run for a new record. Although technical trading was playing a big factor Monday, a weaker U.S. dollar has been the most recent catalyst. The U.S dollar index was 0.14% lower at $74, recovering from a deeper selloff earlier this morning which has added to volatility in the metals. The dollar has been suffering recently as investors worry the U.S. government won't be able to control rising debt and that the currency will continue to lose value.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV