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What happens when the Federal Reserve Chairman acts less optimistic and less as though he is ready to endlessly hit the quantitative easing button?  It might not be the same as a tightening move, but it means less money will be sloshed around all of the “risk-on” assets like commodities.  Today we are seeing big moves downward in commodities on the hint of no more monetary easing efforts. 

It was just yesterday that we pointed to silver as being “back to the silly season.”  We assumed it was running too much, but we admit that the call to the day was probably more luck than it was outright knowledge.  Take a look at the move in the key ADRs tracking the metals:

SPDR Gold Trust (NYSE: GLD) is down 3.3% at $167.66 but the high this morning was $173.59. iShares Silver Trust (NYSE: SLV) is down 4.7% at $34.14 but this hit a high of $36.44 early this morning.

Market Vectors Gold Miners ETF (NYSE: GDX) is down 2.9% at $55.65 after hitting a high of $57.91 this morning.  Global X Silver Miners ETF (NYSE: SIL) is down 1.7% at $25.58 and shares hit a high of $26.62 this morning.

Then there is also the copper fund via the iPath DJ-UBS Copper Total Return Sub-Index ETN (NYSE: JJC), which is down only 0.8% at $49.98  but this was up as high as $50.94 earlier this morning.

It is not just that these are all down on the day.  It is that each rose to a new near-term high in early trading before Bernanke looked less accommodative and less optimistic in his testimony at the House today.  Many of these are down far more than the actual drop if you measure the drop from this morning’s highs.

Some moves higher in commodities are hedges as “the fear trade” against long-term currency devaluation.  Some moves up are based upon the return of growth and the “risk-on trade” being in place.   

JON C. OGG