Gold pushed to $990 at the open of London trading on Wednesday, but that was all she wrote, as the metal declined almost $15 from there to the noon hour and then really plunged, selling off to below $965 by the end of the Comex, and finally ending at $962.60/oz., down $18.50. Overnight, gold has poked higher.

Platinum was rangebound between $1240 and $1250 until the noon hour, then it fell off, drifting to a close at $1235, down $4. Overnight, platinum is trending higher.

Silver followed gold’s path pretty closely and with even greater volatility, bursting past $16.20 in late Hong Kong trading, but then swooning by nearly a full dollar before some late buying action on the Globex led it to a finish at $15.31, down 65 cents. Overnight, silver has fallen off. (Click here for charts)

The precious metals were probably due for a hammering, and that’s what happened to gold and silver, although platinum held up fairly well. It was perhaps to be expected on a day when the dollar reversed its recent trend and scored a solid gainer vs. the euro, while falling oil prices also played in.

With silver off about 4%, twice as much as gold, the Hightower Report had this to say: “The silver market seems to have made even a more definitive failure pattern on the charts than the gold market. Clearly silver and a host of physical commodity markets were undermined by the recovery in the Dollar but given the sharp slide in equity prices, it seemed as if a number of markets were feeling the influence of a dip in economic sentiment. Like gold, it is possible that overbought technicals prompted a number of silver longs to exit ahead of an anticipated volatility event in the financial markets at the end of this week.”

What that “volatility event” might be, we’re not sure, but it perhaps refers to the unemployment numbers for May, due out tomorrow. There’s a lot of fear that if the newly-jobless exceed the expected 520,000, that will be strong evidence that the economy hasn’t bottomed yet. Those who bought silver recently because of green shoots could easily be persuaded to pare back their positions.

Tom Pawlicki, of MF Global, is unfazed concerning gold. “The market is certainly overdue for a downside correction,” he wrote. But, “Longer-term, we still see the market as being supported, with an advance above $1,000 an ounce possible over the next few weeks. Support will come from weakness in the dollar and from ongoing inflows of investment to commodities.”

And James Turk’s opinion is unchanged. The founder of GoldMoney.com said yesterday that, “Gold has traditionally done well during periods of inflation and I believe we are entering a period of hyperinflation … We are going to see clear signs of inflation by the end of the year. The Federal Reserve is trying to destroy the dollar to save the economy.”

Source: Gold, Silver Pummeled