Feeling the fury of this bipolar market, the liquidation surge has arrived, right at the front door of the commodities family, with an emphasis on crude oil, gas, and silver. What started off as a sharp correction in silver is quickly turning into a sell-off of historic proportions. With a four-day decline of almost 30% the selloff in silver is one of the most severe selloffs in the history of the metal’s futures contract. Sheer panic at the CME, 5 margin hikes in 8 days on Silver futures, is unheard of!!
Although we saw signs of a recovery early this week, it was Deja vu in the commodities markets today, with another flash crash similar to the one last Thursday. Crude-oil futures settled below $100 a barrel Wednesday, and gasoline plunged nearly 8%, after the CME Group briefly halted trading in oil, heating-oil and gasoline futures on the New York Mercantile Exchange after the June gasoline contract hit its daily price limit. The CME also boosted daily price limits for crude oil to $20 and for heating oil and gasoline to 50 cents. According to James Williams, an economist at WTRG Economics “A short trading halt only occurs when there is high volatility in the price to give the market a little breathing space.”