Silver surges 5 pct on dollar, gold at records By Rujun Shen | Mon Apr 25, 2011
12:35pm IST
(Reuters) - Spot silver surged more than 5 percent to just
above $49 ounce on Monday, buoyed by a weak dollar and strong
physical demand in Asia that also propelled gold to a record
high for a seventh consecutive session.
U.S. silver futures jumped 8.2 percent to $49.82 an ounce
in unusually large trading volume, just about 50 cents off
its all-time peak of $50.35 hit on Jan. 18, 1980.
"Everyone is buying," said a Hong Kong-based
dealer. "There is stop-loss buying, as well as a good
buying interest from China."
Spot silver hit a 31-year high of $49.25 an ounce, and
was trading at $48.82 by 0643 GMT. It was heading for its
biggest daily gain in five months.
Silver prices have climbed nearly 60 percent so far this
year, after jumping more than 80 percent in 2010, outpacing
gold's 7 percent rise and the 10-percent gain in the 19-commodity
Reuters-Jefferies CRB index.
Silver's astounding run has attracted big and small investors.
Holdings in the world's largest silver-backed exchange-traded
fund, iShares Silver Trust , have risen by 2.4 percent so
far this year, compared to a 4 percent decline in the holdings
of SPDR Gold Trust, the world's top gold ETF.
Buying interest in physical silver has also jumped in India,
where gold is traditionally favoured as a storage of wealth.
"The rally has been great as traders are buying silver
like mad," said an official at a private bank in India.
"We normally don't import silver on a regular basis,
but we imported about 10 tonnes from last month. Investors
are joining in the rally in India to catch on the price
appreciation."
Spot gold hit a record high of $1,517.71 an ounce, before
easing to $1,515.65, up 0.8 percent.
U.S. gold futures also rose to an all-time high, at $1,518.6.
"It's the dollar play," said a dealer based in
Singapore.
The dollar index languished around its three-year low on
Monday, with investors expecting further weakness as the
upcoming Federal Reserves' policy-setting meeting is likely
to announce the continuation of low interest rates.
The escalated violence in Syria and Yemen over the weekend
also helped lift gold, seen as a safe haven during time
of turmoil.