3 Weird Things About Tonight's Huge Silver Selloff (-9%)

TBI ^ | 5-1-2011 | Joe Weisenthal

[blam]

3 Weird Things About Tonight's Huge Silver Selloff

Joe Weisenthal
May 1, 2011, 7:49 PM

After last week's manic action, silver is falling out of the bed to start the new week, declining by over 9%.

A few quick thoughts on the weirdness:

* Nobody really knows what's up. Querying around, nobody has any solid sense (yet) of what's driving the decline. There was no particular news that would seem to be feeding into this. Update: There's a little bit of chatter about the weak Chinese PMI report from this morning, but it doesn't seem that convincing or robust of an explanation. There's also talk about margin hiking (which has been going on forever).

* Silver is a major standout. Gold isn't moving the same way. Other commodities are down a bit, and the dollar is up, but not on the same scale.

* US futures remain higher. This is a big surprise, given how consistently silver has traded in the same direction as equities.

[Cool Guy]

Driven down by capture of Osama. The probability of a terrorist act is perceived to have gone down greatly and thus the drop in prices for commodities.

I am sure some traders were privy to this news before the press release and President’s speech.

[BenKenobi]

Just that the dollar is low against other currencies means that it will eventually rise against them.

[grey_whiskers]

Congrats on doing the Ironman. My dad was a huge triathalon/distance runner until a glioblastoma took him away from us in December. He would not have liked that run, with snow swirling around, but would’ve been smiling anyway. He was that kind of guy, always a half full glass and enjoying the endorphins from running.

My condolences. There's a Calvin and Hobbes cartoon you might like, btw.

The MN Ironman is strictly a bike ride, however.

To stay on topic, my mom who lives with us now has a bunch of Kennedy half dollars. Think they’ll sprout if I plant ‘em? :)

It worked for Uncle Andrew in The Magician's Nephew. Poor old Brandy!

Cheers!

[Stentor]

Wouldn’t surprise me if he sold everything he had.

Would it surprise you that it was done in 2006?

[Jonty30]

Somebody mentioned that. I wasn’t aware of that.

[blam]

"The probability of a terrorist act is perceived to have gone down greatly and thus the drop in prices for commodities."

I think anger over the death of OBL increases the probability of an even greater attack.

[Richbee]

You are WRONG! The drop happened in early Asian trading three to four(4) hours before President Obama called U.S. Congressional leaders and it was a non-economic event.
‘
READ AN AUSTRALIAN PERSPECTIVE VIA WSJ:

http://www.theaustralian.com.au/business/markets/silver-tumbles-45pc-gold-dips-as-investors-take-profits/story-e6frg91o-1226045321896

[Cool Guy]

I guess we were all wrong.

http://www.bloomberg.com/news/2011-05-02/silver-margins-raised-by-comex-for-second-time-in-a-week.html

[blam]

"I guess we were all wrong."

Yup.

Fortunately, all I've ever confessed to being is a chip-maker, not a specialist on silver, lol.