NEW YORK ( TheStreet ) -- Gold and silver were pummeled Tuesday on a surprise rate hike in India and a volatile U.S. dollar on a broad commodity selloff.

Gold for June delivery closed down $16.70 to $1,540.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,551.40 and as low as $1,516.20, but was tanking almost $30 in after-hours trading. The spot gold price was down more than $15, according to Kitco' gold index.

Silver prices fell another $3.49 to $42.58 an ounce and almost breached the $40 level in after-hours trading. The CME has raised margin requirements again for silver by another 11.6%, the third time in a week. It will now cost a trader $16,200 to buy a 5,000 ounce contract, the move will go into effect Tuesday after market close and leveraged traders were dumping positions to avoid having to pay more for silver. If there is more leverage to shake out of the market then silver prices could continue to slide looking at $38 as the ultimate support level.

In contrast, it only costs $6,751 to buy a 100 ounce gold contract, which at current prices is worth $154,300 while silver's 5,000 ounce contract is worth $222,350.

In the latest commitment of traders report ending April 26th, speculative long positions in silver sunk 10.8% while short positions jumped 24%. For gold, speculative longs sunk 5% and short positions were flat as more traders bet against the rise in the silver price.

Both gold and silver were struggling Tuesday as the ratio between the two metals continues to adjust now at 35 versus 31 when metals were at recent highs.

"This weekend's outlier aside, silver tends to match-and-extend whatever gold's doing. So a rising gold/silver ratio typically comes together with falling prices for both," says Adrian Ash, head of research at "Anyone expecting a shift back to the historical or pre-modern levels (of 16 and 12 respectively) should note the ratio's huge swings through 1979 and 1980."

Mark Johnson, co-manager of USAA Precious Metals and Minerals Fund, thinks the gold/silver ratio should be closer to 60 rather than 30 and only has a 0.5% position in silver. "Five months ago we had 8% silver and now we have less than 0.5% in silver." If the ratio got to 60:1, Johnson would get interested in the metal again.

"Gold will do better," says Johnson, who thinks that recent silver mines will ramp up supply so fast that it will overtake demand. "We view volatility in gold as an opportunity ... during significant downward moves we are in there buying"

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