Explanations for today's selloff have run the gamut. Headline news like hawkish comments from Federal Reserve members to worries that there will be no third round of quantitative easing to improving economic growth in the U.S. were the favorites. But most traders weren't surprised by the move down.
"I see ... that silver has been outperforming gold," argues Gero, "and I think silver is outperforming gold because it is a bridge between investment demand and industrial demand." Gero also says that gold is less speculative and that silver is where investors and traders are trying to hedge their currency positions. Year -to-date, silver has rallied 20% while gold is relatively flat despite hitting new records. Although both metals had been down at one point 1% Monday -- 0.70% for gold and 1% for silver -- on average silver outperforms gold by 0.5% to the upside and downside. The ratio between the two metals is 38, meaning it takes 38 ounces of silver to buy 1 ounce of gold. The lower the ratio the higher the silver price. There are some technical explanations for silver and gold's selloff. Gold rallied 2.6% in March, factoring in its intraday high, while silver was up 14%, factoring in its intraday 31-year high of $38.18 an ounce. As global uncertainties persist from Japan to the Middle East/North African region to the Eurozone, taking profits where one can might be a popular option. Also, the first quarter ends Thursday, so portfolio managers might also be under pressure to show gains.