COMMODITIES : Silver Futures Prices Fall to 20-Month Low

Prices of silver futures slid to a 20-month low on New York’s Commodity Exchange on Friday, the fourth straight day of steep losses, and analysts said the metal appeared to be headed below $6 an ounce.

“It certainly looks like it’s going to try,” said Stephen W. Platt, metal markets analyst with Dean Witter Reynolds Inc. in Chicago.

On other markets, other precious metals also retreated while copper futures gained, livestock and meat were lower, grains and soybeans were mixed, energy futures were mixed and stock index futures advanced.

Silver for delivery in December tumbled nearly 36 cents an ounce in the four sessions ended Friday. Prices settled 11 to 14.1 cents lower on Friday alone, with the December contract at $6.08 an ounce, the lowest Comex silver price since March 27, 1987.

Metals experts cited various factors for silver’s sudden decline, but all agreed that supplies of the metal were more than adequate and that the recent sharp rise in short-term interest rates has had a depressing effect on demand from both the industrial and the investment sectors.

The dollar’s weakness since the Nov. 8 presidential election would ordinarily help prop up the precious metals because of its inflationary implications.

Weakening for Months

But “the dollar going down hasn’t been enough to offset the negative influence of the interest rates going up,” said Craig Sloane, metals analyst with Smith Barney, Harris Upham & Co. in New York.

Sloane said the silver market actually had been weakening relative to gold for the past two months, even though both metals had been trending higher since the start of October.

But the general decline in the precious metals during the past week “kind of took away the camouflage,” he said.

“Gold and silver have a little reversal in place, and I wouldn’t be surprised to see it follow through,” Sloane said. “I can see gold possibly testing the lows (below $400 an ounce) that it made in September and silver maybe breaking $6 and heading to $5.75.”

Bette Raptopoulos, metals analyst with Prudential-Bache Securities Inc. in New York, said much of Friday’s silver decline was because of dealer selling of the physical metal on speculation that a month-old miners strike in Peru was near its end and availability of silver soon would increase.

Gold settled $2.70 to $3.80 lower, with December at $418.10 an ounce.

Copper futures advanced on the Commodities Exchange on continuing concerns about supply disruptions in Chile and Peru, analysts said.

Copper settled 0.50 cent to 2.60 cents higher, with December at $1.359 a pound.

Hog futures prices dropped sharply on the Chicago Mercantile Exchange as the futures market adjusted to unexpected weakness in the pork products market, said Thomas Morgan, president of Sterling Research Corp. in Arlington Heights, Ill.