Shares of silver miners Silvercorp Metals Inc. (NYSE:SVM), Impact Silver (OTC:ISVLF.PK), Mines Management (AMEX:MGN), Silver Standard Resources (NASDAQ:SSRI) and Endeavour Silver (AMEX: EXK) were suffering again as prices plunged again in Tuesday trading.
Silver plunged another $3.49 Tuesday to settle at $42.576 per troy ounce on the Comex division of the Nymex. In after hours trading the price almost dropped below $40 an ounce.
Much of this has been the result of the decision by the CME Group to raise margin requirements by 11.6 percent, starting at the close of market on Tuesday.
To buy a 5,000 ounce contract, silver traders will now have to put up $16,200.
Leverage traders got rid of their silver positions over the last couple of days, driving the price of silver down. Expectations are silver could bottom out as about $38 if there's more leverage leaving the market.
Other than some speculation, other reasons for the boost in silver prices include the collapsing U.S. dollar, tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening inflation and consequences of the Japanese earthquake. India also raised its interest rates unexpectedly on Tuesday, putting some downward pressure on gold and silver as well.
Of the silver companies in the article, Endeavour was down the most, closing Tuesday at $9.92, falling $0.69, or 6.50 percent.
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