* Silver slides by most since October 2008
* Technical selling in thin condition compound slide
* Gold recoils after record high; PGMs lose ground
* Coming Up: Speech by U.S. President Obama; 0245 GMT
(Recasts, adds details and quotes)
By Nick Trevethan
SINGAPORE, May 2 (Reuters) - Silver prices tumbled by 7
percent on Monday, the biggest loss since December 2008, with
spot prices sliding to as low as $42.58 an ounce and futures
dipping to $42.20 in a technically driven selloff compounded by
thin trading conditions.
By 0213 GMT, spot silver stood at $44.63 an ounce,
down 6.6 percent on the day, while COMEX silver for July
delivery <SIcv1> traded at $44.200 an ounce versus $48.599 on
Friday.
Spot gold prices fell 1.1 percent to $1,546.39 an
ounce, after earlier touching an all-time high of $1,575.79.
Markets across large parts of Asia and much of Europe were
closed for May Day and Labour day holidays, reducing the number
of market participants and making for volatile trade.
"Precious metals basically turned around in illiquid markets
on snippets of news that suggest that the risk profile will
change," said Jonathan Barratt, managing director at Commodity
Broking Services in Sydney.
"Silver was also off the board in terms of technicals and
the market decided to just smack it in the head."
Speculators scaled back their bullish bets in COMEX silver
futures and options to the lowest level since early February,
regulator data showed on Friday. []
Speculators in COMEX silver held a net long position 25,791
lots in the week ending April 26, cutting 5,413 lots, data from
the Commodity Futures Trading Commission (CFTC) showed.
The CME Group Inc said on Thursday it would raise
maintenance margins for COMEX silver futures by 13.2 percent to
$10,750 per contract from $9,500 effective Friday, April 29.
Some traders put silver's spectacular fall down to an unwind
of a short gold-silver ratio position, compounded by automated
stop-loss orders.
"There is nothing from a fundamental perspective to cause a
fall this large. Silver has been the most rapidly appreciating
of the metals in the past months and if there was one that
looked a bit frothy it was silver," said Ben Westmore,
commodities economist at National Australia Bank.
"This is mostly technical. We expect silver to be in
relatively close step with gold and while both have risen
strongly, silver may have moved a bit too far ahead."
But in spite of the falls, traders said it was too soon to
close the book on silver's astounding 170 percent rally over the
past 12 months.
"Although that was a brutal wash out of some length, silver
is now back into the original bullish trend channel, so while
$41 holds, the trend is still intact," one trader said.
In other precious metals with large-scale industrial
applications, platinum fell 1.5 percent and palladium
dropped 2 percent.
China's manufacturing growth slowed in April, a survey
showed on Sunday, suggesting that the government's tightening
efforts have weighed on the world's second-largest economy more
heavily than expected. []
The official purchasing managers' index for China fell to
52.9 in April from 53.4 in March, well shy of market forecasts
for an increase to 54.0.
Precious metals prices 0213 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1546.39 -17.26 -1.10 8.94
Spot Silver 44.63 -3.17 -6.63 44.62
Spot Platinum 1836.24 -28.01 -1.50 3.89
Spot Palladium 773.72 -15.63 -1.98 -3.22
TOCOM Gold 4044.00 15.00 +0.37 8.45 50172
TOCOM Platinum 4830.00 14.00 +0.29 2.85 7166
TOCOM Silver 115.80 -10.60 -8.39 42.96 4820
TOCOM Palladium 2027.00 11.00 +0.55 -3.34 303
COMEX GOLD JUN1 1546.90 -9.50 -0.61 8.83 31075
COMEX SILVER JUL1 44.37 -4.23 -8.70 43.41 35365
Euro/Dollar 1.4803
Dollar/Yen 81.24
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Additiopnal reporting by Alejandro Barbajosa; Editing by
Michael Urquhart)
