Gold and Silver Fall After Global Sell-Off

September 25, 2011 James Heinsman Hedge Fund News

Despite recent claims that gold is the way to go during the financial crisis, it, alongside silver and several other commodities, has fallen as a result of a global sell-off in financial markets.

On Thursday, gold fell 3.7%, or $66.40, to $1,741.70 per ounce. Silver, a high-demand metal in many industries, also took a severe hit, falling 9.6% to $36.58 an ounce.

The sell-out, according to analysts, was a result of margin calls for hedge funds and other major investors. “We’re seeing hedge funds that have to raise cash, and to do that they have to sell what has been working for them so far this year,” said Ryan Detrick of Schaffer’s Investment Research.

Analysts added that silver was affected significantly as well because at least half of its demand comes from industrial uses. “If the economy contracts at all, there’s going to be a lot of excess silver that’s sitting in the supply chain,” explained Phil Streible of MF Global.

Economy, Finance, Global Crisis, Gold, Hedge Funds,

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