There are many different factors at play right now in the volatility of silver. First off, the run up may have had some fundamental reasons behind it, but it clearly got to the mania stage in the last couple weeks. It was a move ready to crash. Raising the margin requirements was clearly an effort by the powers that be to bring down the price. But all it did was produce the reason for all the speculators who were getting in for the momentum run to head for the hills at the first sign of trouble.
There are historical seasonal patterns to the moves in gold and silver. http://www.spectrumcommodities.com/education/commodity/charts/gc.html April, May is historically a weak period. There isn't the jewelry demand in India and other places. Prices are generally weak, all the way through the summer and then August is the time to buy again. Plus you've got QE2 ending at the end of June which may scare folks in both the commodity and equity markets and create some support for the dollar short term. I can see this correction and stagnation lasting into the summer before the next ride up.
I don't think we've yet seen anywhere near the ultimate highs in silver and gold. But like I said before, it isn't going to be a one way ticket. It's going to be one hell of a roller coaster ride. And right now it's down down down.
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