Gold, Silver Fall for First Time in Two Weeks on Investor Sales After Jump

Gold and silver futures fell for the first time in two weeks as some investors sold the precious metals following the rallies.

Yesterday, gold climbed to a record $1,519.20 an ounce, and silver approached $50 an ounce, extending a surge to the highest in 31 years. Today, silver tumbled the most in six weeks following an 18 percent gain since April 12.

“Given the pace and scale of gains in gold and silver in recent weeks, there is the threat of a deeper correction in the coming sessions,” James Moore, an analyst at TheBullionDesk.com inLondon, said in a report.

Gold futures for June delivery dropped $5.60, or 0.4 percent, to settle at $1,503.50 at 1:45 p.m. on the Comex in New York. The price, up 3.8 percent in the previous eight sessions, has climbed 30 percent in the past year.

Silver futures for July delivery tumbled $2.094, or 4.4 percent, to $45.079, the biggest drop since March 15. Yesterday, the price reached $49.845, the highest since January 1980.

The precious metals led commodities lower on bets that monetary policy will tighten in the U.S. and China, boostinginterest rates.

Federal Reserve Chairman Ben S. Bernanke will hold a media conference after a policy statement tomorrow following a two-day meeting in Washington.

‘Event Risk’

The meeting “is a possible event risk, but we expect that Bernanke will confirm that U.S. short-term rates are most likely to stay low,” Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, said in an e-mail. “This confirmation of low nominal rates, combined with higher inflation, will be positive for gold.”

Gold and silver probably won’t fall for more than three days, said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter.

“It’s more the action in silver that’s making me a little queasy,” Charles De Vaulx, a manager at International Value Advisers LLC, said yesterday in an interview with Margaret Brennan on Bloomberg Television’s “InBusiness.”

This year, the metal has surged 46 percent, the most among 19 raw materials in the Thomson Reuters/Jefferies CRB Index.

Platinum futures for July delivery fell $22.70, or 1.2 percent, to $1,805.40 an ounce on the New York Mercantile Exchange. The price has climbed 3.5 percent in the past 12 months.

Palladium futures for June delivery declined $5.10, or 0.7 percent, to $755.75 an ounce. The metal has gained 33 percent in the past year.

(Source: http://www.bloomberg.com/news/2011-04-26/gold-silver-fall-for-first-time-in-two-weeks-on-investor-sales-after-jump.html)