Silver Producers' Shares Plunge as U.S. Dollar Strengthens

The U.S. dollar continues to wreak havoc in the overall commodities market, as prices plunge in response to the greenback's recent strength.

Silver was no different, as it dropped to $16.63 an ounce on late morning Tuesday, down from Monday's close of $18.11. Shares of silver producers fell along with the silver prices.

Some silver producers falling were Coeur d'Alene Mines Corp. (NYSE: CDE), which fell by 28 cents, or 6.9 percent, to $3.76; Pan American Silver Corp. (Nasdaq:PAAS) dropped $1.97, or 5.1 percent, to $36.41; and Silver Wheaton Corp. (NYSE:SLW) fell 55 cents, or 3.5 percent, to $14.98.

The Dow Jones-AIG Silver Index dropped 4.2 percent.

Along with the stronger U.S. dollar, another factor is the slowing U.S. economy, which some believe will decrease the chances that inflation will rear its ugly head, making precious metals less valuable in the eyes of investors, who typically go there in inflationary times.

The manufacturing index of the Institute of Supply Management said it came in at 48.6 in March, The thinking is if it's below 50 there is a contraction going on in the economy, rather than expansion.

As usual, this is today's activity and response. When the dollar weakens again we could see all this change very quickly.