Silver prices declined by more than 2% today after climbing to their highest level since February 2013 in the previous session. The Chicago Mercantile Exchange raised the maintenance margins for COMEX 5000 Silver Futures by 17.9% from $14,000 to $16,500 per contract for February. And this prompted investors to book profits.
Spot silver is currently trading at $27.51 per ounce as of 0812 GMT.
Edward Meir, an analyst at the ED&F Man Capital Markets, noted that silver went on a sudden upward trend without a similar movement in other metals. It means that the metal also vulnerable to a sudden downward trend. IG Market’s analyst Kyle Rodda added that it was a wild and unpredictable market behavior. Precious metals analysts expect silver prices to remain volatile in the near term.
Top Democrats in both the Senate and House of Representatives filed a joint $1.9 trillion budget measure to bypass the Republicans on the COVID-19 relief bill. The move will allow the Democrats to pass the coronavirus aid legislation with only a simple majority through reconciliation. President Joe Biden already met with 10 Republican senators who want to reduce the relief size to around a third of Biden’s proposal. He described the discussion as productive but said he will not slow down work on this urgent crisis response and will not settle for a package that fails to meet the moment.
In gold news, spot gold is currently trading at $1,846.11 per ounce as of 0812 GMT.
In India, the government lowered import duties on gold and silver from 12.5% to 7.5%. But it added a 2.5% cess, which brings the total tax to 10%. According to industry officials, the move aims to boost the retail demand for gold and discourage smuggling. Data from the World Gold Council shows that 120 tons of the yellow metal were smuggled into the country in 2019.
Meanwhile, the China Gold Association reported that the country’s gold consumption in 2020 dropped by 18.3% to 820.98 tons compared to the previous year. Jewelry consumption fell by 27.45% to 490.58 tons, and industrial consumption declined by 16.81% to 83.81 tons. However, the consumption of gold bars and coins rose by 9.21% to 246.59 tons.