Profit-Taking Topples Silver From 21-Month High
May. 03, 1993
Undated (AP) _ Profit-taking toppled silver futures prices from a 21-month high Monday after an industrial survey signaled weakness in the manufacturing economy. Gold and platinum prices also fell.
On other commodity markets, grains and soybeans ended mixed; hog futures surged; cattle futures were mixed; and oil futures rose.
Silver for May delivery dropped 9.9 cents on New York's Commodity Exchange to $4.29 a troy ounce. The contract traded up to $4.45 during the session, 6.1 cents above Friday's settlement and the highest price for spot deliveries since July 18, 1991.
June gold fell $1.90 to $354.40 a troy ounce on the Commodity Exchange. July platinum dropped $3.30 on the New York Mercantile Exchange to $386.60 a troy ounce.
Investment funds dumped silver after seven straight days of gains that had boosted the metal's price by 54 cents, or about 14 percent. The selling was prompted in part by the National Association of Purchasing Management's report that the U.S. manufacturing economy contracted in April for the first time in seven months, analysts said.
The report ''injected some caution in the trade,'' said Stephen Platt, metals analyst with Dean Witter Reynolds Inc. in Chicago. He said the market was due for a correction after the recent gains.
Analysts did not pronounce dead the broader rally that had lifted silver's price by nearly 27 percent from the Feb. 22 low of $3.51 an ounce - but neither were they confident it would resume soon.
''We've never really trusted the rally in silver. There's nothing on the fundamental front to justify it,'' said George Milling-Stanley, precious metals analyst with Shearson Lehman Brothers Inc. in New York.
Silver has industrial uses that make it a barometer of industrial activity and the economy. Unlike gold, which has risen strongly this spring on Asian jeweler demand as well as investment demand, silver's run up was almost entirely speculative, Milling-Stanley said.
''I'm not going to say it's not going to go back up again,'' he said. ''I still think we will see higher silver, later in the year, perhaps, provided the U.S. economy does get moving.''
Grain and soybean futures prices ended mixed on the Chicago Board of Trade in cautious trading ahead of a crop report and a weather forecast that could prompt fresh buying in the corn market on Tuesday.
The Agriculture Department said in a weekly report after the close that the U.S. corn crop was just 9 percent planted as of Sunday compared with the five- year average for that date of 32 percent. The key states of Illinois, Indiana and Iowa had no more than 3 percent of their corn planted due to rainy weather that has kept farmers from their fields.
A National Weather Service forecast released late in the afternoon predicted normal to above-normal precipitation in the Midwest early next week. That could prevent fields from drying sufficiently after the dry weather that some forecasters expect later this week.
Wheat for May delivery fell 1/2 cent to settle at $3.47 1/2 a bushel; May corn rose 3/4 cent to $2.28 3/4 a bushel; May oats fell 1/2 cent to $1.44 a bushel; May soybeans rose 3 cents to $5.91 3/4 a bushel.
Hog and pork belly futures rose sharply on the Chicago Mercantile Exchange on reports of surprisingly light hog marketings. Cattle futures ended mixed.
Live cattle for June delivery rose .45 cent to 77.22 cents a pound; May feeder cattle rose .17 cent to 86.22 cents a pound; June live hogs surged 1.25 cents to 52.60 cents a pound; May frozen pork bellies jumped 1.68 cents to 44.10 cents a pound.
Light sweet crude oil for June delivery rose 4 cents on the New York Mercantile Exchange to $20.57 a barrel; June heating oil rose .04 cent to 55.88 cents a gallon; June unleaded gasoline rose .32 cent to 61.81 cents a gallon; June natural gas fell 7.6 cents to $2.289 per 1,000 cubic feet.