Pain for (SLW) (HL) (GPL) (AG) (MFN) As Silver Plummets

Shares of silver companies Silver Wheaton (NYSE:SLW), Hecla Mining (NYSE:HL), Great Panther (AMEX:GPL), First Majestic (NYSE:AG) and Minefinders Corp. Ltd. (AMEX:MFN) were punished again as silver prices fell in Tuesday trading.

Silver plunged another $3.49 Tuesday to settle at $42.576 per troy ounce on the Comex division of the Nymex. In after hours trading the price almost dropped below $40 an ounce.

Much of this has been the result of he decision by the CME Group to raise margin requirements by 11.6 percent, starting at the close of market on Tuesday.

To buy a 5,000 ounce contract, silver traders will now have to put up $16,200.

Leverage traders cut their silver positions over the last couple of days, driving the price of silver down. Expectations are silver could bottom out as about $38 if there's more leverage abandoning the market.

Other than some speculation, other reasons for the boost in silver prices include the collapsing U.S. dollar, tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening inflation and consequences of the Japanese earthquake. India also raised its interest rates unexpectedly on Tuesday, putting some downward pressure on gold and silver as well.

Hecla Mining closed Tuesday at $8.42, falling $0.45, or 5.07 percent.