By PAN PYLASLONDON (AP) â¿¿ The price of silver was the standout mover in financial markets Monday as it took a hammering for the second trading session in a row, even as stocks remained relatively solid amid hopes over the U.S. economy. By late-afternoon London time, the metal's price was down 3.8 percent to $21.66 an ounce. Earlier in the session, it had fallen over 7 percent to $20.25, its lowest level since September 2010. Commodity prices have suffered in recent weeks as investors preferred to put their money in stock markets. Gold has dropped the most, but silver often falls in its slipstream. The price of gold was also lower Monday, down 1.6 percent at $1,364 an ounce. Aside from investors' preference for other assets, commodities have struggled for other reasons too, including fears that indebted eurozone countries may sell some of their gold reserves to raise money. Weak inflation â¿¿ in spite of huge money-creation policies by many of the world's leading central banks â¿¿ has also taken its toll. Commodities, especially gold, are used as a store of value when inflation fears grow. "Growing evidence of falling inflation in Europe, the U.S. and the rest of the world has prompted investors to lighten their holdings in both gold and silver in the past few weeks," said Michael Hewson, senior market analyst at CMC Markets. Elsewhere, stocks were subdued amid a dearth of economic data. But even though many stock indexes around the world have either hit record highs or multiyear peaks, investors have so far refrained from widespread profit-taking â¿¿ a sign of underlying strength. In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 6,755 â¿¿ its highest level since mid-2000. Germany's DAX, which has set a series of all-time highs, rose 0.7 percent to 8,455. The CAC-40 in France was 0.5 percent lower at 4,022.
In the U.S., the Dow Jones industrial average was up 0.09 percent at 15,369 while the broader S&P 500 index was up 0.14 percent to 1,669. The two indexes have also racked up a series of record highs.Given the stock markets' huge advances this year, some analysts are beginning to wonder when a reverse will take place. That could be triggered if officials at the U.S. Federal Reserve start pondering an early end to the central bank's super-easy monetary policy after a run of strong U.S. economic data, particularly with regard to housing and jobs. The money generated by the Fed over the past few years in an attempt to keep the U.S. economy on an even keel has been one of the reasons why financial assets, such as stocks, have enjoyed strong gains despite a patchy global recovery. In that context, investors will be particularly interested to hear what Fed chairman Ben Bernanke says when he addresses lawmakers on Wednesday. "With many of the main indices looking dangerously overbought we are probably overdue a correction," said Mike McCudden, head of derivatives at Interactive Investor. "All eyes will be on the Congressional testimony on Wednesday for confirmation that the Fed will start to scale back the bond purchasing program later in the year," he added. In the currency markets, the dollar was slightly soft as traders booked some recent gains, with the euro up 0.42 percent at $1.2874. Against the yen, it was 0.7 percent lower at 102.41 yen. Earlier in Asia, stock markets had a strong start to the week. Japan's Nikkei 225 index jumped 1.5 percent to 15,360.81 while Hong Kong's Hang Seng surged 1.8 percent to 23,493.03. Benchmarks in mainland China also rose but South Korea's Kospi fell 0.2 percent to 1,982.43. On the commodity markets, with the benchmark New York rate for crude oil was up 91 cents at $96.94 a barrel.