Silver prices plunged for a third straight day, leading a broad sell-off in commodities in the wake of some weaker-than-expected economic data and indications that some big-name investors are turning away from precious metals.
Until this week, silver was one of this year's hottest investments worldwide. On Wednesday, the near-term silver futures contract tumbled $3.19, or 7.5%, to $39.38 an ounce, the lowest price since April 4.
Since reaching a 31-year high of $48.58 an ounce Friday, silver has plummeted 19%. But the metal, which had become a favorite bet of small investors, remains up 27% year to date.
Of the 19 commodities in the Thomson Reuters/Jefferies CRB index, 16 lost value Wednesday. The index fell 1.8%, its third straight decline.
Prices of raw materials rallied sharply starting in September as optimism about the economy grew and the falling U.S. dollar made many commodities less expensive for foreign investors and speculators.
But survey data released Monday suggesting a modest slowdown last month in U.S. manufacturing activity and a report Wednesday pointing to a more abrupt service-sector slowdown have raised concerns about the pace of the recovery, and therefore about demand for commodities.
Continued credit-tightening by many foreign central banks, such as India's, also is stoking fresh worries about growth overseas.
Copper, highly sensitive to the economic outlook, slumped 12 cents, or 2.8%. on Wednesday to $4.12 a pound, a seven-week low. Copper is down 8.4% since April 8.
U.S. crude oil futures fell $1.81 to $109.24 a barrel, a two-week low.
Silver and gold also were hit after the Wall Street Journal reported that billionaire George Soros and other prominent investors had sold some of their precious-metal holdings, taking profits after hefty gains in those markets since August.
Gold fell $25.20, or 1.6%, on Wednesday to $1,514.90 an ounce. The yellow metal is down 2.7% since hitting a record of $1,556.70 on Monday, but it is up 6.6% this year.