Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinSilver plunged 10.3% to close at $26.40 after CME raised margin requirements for trading silver futures, slamming the brakes on yesterday's speculative frenzy among small stock traders. Caught in silver's downdraft and pressured by rising risk appetite, gold fell 1.6% to close under $1,834, as investors shifted away from safe havens.

Small retail day traders swarmed into silver mining stocks and bullion-backed silver ETFs yesterday, spurred by the same kind of social media coordination on Reddit and other platforms that created an immense short-squeeze in GameStop and AMC stocks last week. Silver prices jumped more than 9% to an 8-year high.

That artificial rally reversed today, however, after CME Group raised the margin requirement by 18% on silver futures, requiring far more collateral for trades. The move effectively squelched the short-squeeze mania in silver, deflating the brief silver bubble and pulling gold lower in sympathy.

Adding to pressure, US equities rallied for a second session, with all three major indexes adding more than 1.4% behind expectations for more pandemic aid from the Biden administration.

Treasury yields rebounded sharply on expectations that another $1 trillion or more in fiscal aid from Congress and the accelerating rollout of vaccines will boost economic growth and inflation. Rising yields add to the opportunity cost for holding gold instead of bonds as a safe-haven asset.

The other precious metals also fell, with platinum dropping 3.8% while palladium slipped 0.6%.

At the Comex close: April gold fell $30.50 to $1,833.40; March silver tumbled $3.02 to $26.40; April platinum dropped $42.80 to $1,096; and March palladium slid $14% to $2,227.70 an ounce.