Bulls in silver see red

MUMBAI: Silver prices posted its steepest intraday decline in 14 months while gold also cooled off from near record highs on upbeat services sector growth and jobs data from the US , which hinted at moderate economic growth .

Nitin Kedia of Kedia Commodity added that the 3.8% fall in silver and gold to a lesser extent could result in some brokers making margin calls on their clients . He added that margins to trade gold and silver futures were around 5-6% .

Precious metals also act as safe haven investments . Since India imports almost all of the gold and silver it consumes , international price moves influence local prices of the metals .

On MCX , at 11:23 pm IST, silver front month contract traded down 3.8% at Rs 49420 a kilo . Gold October expiry contract traded down 2.3% at Rs 38898 per 10 gms . Silver fell the most in a day since June 15 last year as a technical parameter (RSI) showed it was heavily overbought , said Kedia .

Silver and gold fell on long liquidation as bulls cut their outstanding bullish bets . For eg, at the time of writing silver Open interest was 11203 lots near closing against 12691 lots on Wednesday .