vertical drop Gold, Silver, Platinum and Palladium Sunday, May 1 2011 Stock Market Today Shares, gold , mortgage rates

vertical drop Gold, Silver, Platinum and Palladium Sunday, May 1 2011 : non-eventful Sunday afternoon when out of no where, precious metals started their contest of vertical drop, as shown int the following live charts from Kitco.com as of Sunday, May 1, around 7:00 pm EST.

As expected, silver (NYSE:SLV) is the undisputed champion, dropping about 10% from the previous day’s close, gold (NYSE:GLD), platinum (NYSE:PPLT) each went down about 7.5%, while palladium (NYSE:PALL) lost about 2% (percentage based on spot prices on charts).

For now, there does not seem to be any significant event that could prompt such a move in precious metals. So, my best guess is that this Sunday sell-off is most likely related to the recent margin hikes by CME and MF Global that finally took their toll on the Silver market, forcing some big players to liquidate positions triggering a cascading stops to be executed.

According to Inside Futures, MF Global implemented a 175% margin increase over the CME’s recent 9% margin hike. Such a huge margin increase typically will trigger a mass liquidation and reduce traders’ participation in the silver market, which would also trigger sell offs in other commodities. Crude oil and copper were both traded modestly lower, partly responding to the movement in precious metals.

Related: SPDR Gold Shares Trust (NYSE:GLD), iShares COMEX Gold Trust (NYSE:IAU), Market Vectors Gold Miners ETF (NYSE:GDX), PowerShares DB Gold Double Short ETN (NYSE:DZZ), iShares Silver Trust (NYSE:SLV), PowerShares DB Silver Fund (NYSE:DBS), ProShares Ultra Silver (NYSE:AGQ), ProShares UltraShort Silver ETF (NYSE:ZSL), ETFS Physical Platinum Shares (NYSE:PPLT), ETFS Physical Palladium Shares (NYSE:PALL).

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