May 3, 2011, 12:44 p.m. EDT

Silver futures fall 5% as gold extends losses

Exchange operator raises silver margin requirements for third time

By Claudia Assis and Deborah Levine, MarketWatch

SAN FRANCISCO (MarketWatch) — Silver futures slid Tuesday, dragging down gold and other commodities after the main U.S. metals exchange again announced higher margin requirements to trade silver.

Silver for July delivery /quotes/comstock/21e!f1:si\n11 SIN11 -9.60% fell $2.34, or 5.1%, to $43.71 an ounce on the Comex division of the New York Mercantile Exchange.

The metal earlier dipped to as low as $42.98 an ounce, a 6.7% loss from Monday’s settlement. Silver has lost 10% since Friday.

Stronger dollar hits commoditiesPaul Vigna and Joe Bel Bruno discuss today's market action and the impact a rebound in the U.S. dollar is having on commodity prices.

“A selloff of this magnitude was inevitable,â€