THE silver price has overshot the metal's fundamentals and a correction is due, an analyst says.
The silver futures price has been highly volatile, rallying to a 31-year high last week and tumbling 12 per cent in a matter of minutes on Monday after the Chicago Mercantile Exchange raised its margin requirement for speculative traders.
On Tuesday, the silver price for July delivery on the Chicago Mercantile Exchange firmed to $US45.16 an ounce, from an opening of $US44.03/an ounce.
''With silver having run so hard for so long, I believe we're now divorced from the fundamentals,'' he said. While its main uses were for jewellery and as a store of value, its industrial uses were being threatened as other malleable, conductive materials were sought as lower cost substitutes.
The silver futures price has been highly volatile, rallying to a 31-year high last week and tumbling 12 per cent in a matter of minutes on Monday after the Chicago Mercantile Exchange raised its margin requirement for speculative traders.
On Tuesday, the silver price for July delivery on the Chicago Mercantile Exchange firmed to $US45.16 an ounce, from an opening of $US44.03/an ounce.
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CMC Markets chief market strategist Michael McCarthy said the silver futures price would remain volatile after trading in a 4 per cent range on Tuesday.''With silver having run so hard for so long, I believe we're now divorced from the fundamentals,'' he said. While its main uses were for jewellery and as a store of value, its industrial uses were being threatened as other malleable, conductive materials were sought as lower cost substitutes.
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