NY silver climbs to 22-year high, gold steadies Fri Mar 17, 2006 10:46 AM ET
NEW YORK, March 17 (Reuters) - U.S. silver futures trekked to a new 22-year peak on Friday amid expectations for rising demand and prices, while gold was flat and other precious metals firmed on spillover speculative buying.
May silver <SIK6> on the COMEX division of the New York Mercantile Exchange was up 5.8 cents, or 0.56 percent, at $10.40 an ounce at 10:23 a.m., dealing from $10.30 to $10.46 -- the priciest for futures since October 1983.
Silver has climbed 16 percent this year amid hopes that the U.S. Securities and Exchange Commission might soon approve a proposed U.S. silver exchange-traded fund from Barclay Global Investors.
Traders are accumulating positions on thoughts that the ETF, which would be backed by physical silver, will gobble up much of the available metal supply and help boost demand and prices in the market.
"We continue to expect silver to gap higher, should the SEC announce its approval for the silver ETF, and forecast silver at $10.50 in one month and $11/oz in three months," analysts at UBS said.
ETFs are designed to track the price of an underlying market or commodity, like a stock index or gold, and trade like listed stocks on any exchange.
To date, the SEC has not issued any word on the ETF since a public comment period on it ended last month.
Spot silver <XAG=> was quoted at $10.40/10.43 an ounce, compared with $10.31/10.34 at Thursday's close in New York. Friday's spot reference rate was fixed by London bullion dealers at $10.3650.
Gold advanced for a fifth straight day on currency-related buying and investment in precious and base metals.
April delivery gold <GCJ6> gained 30 cents to $555.70 an ounce, trading between $552.50 and $558.60.
Strong silver and base metals and dollar weakness helped keep gold firm, traders said, although it remained capped below resistance at $557 to $560.
John Kosar, president of Asbury Research, said that, technically, retail investors "are still way too bullish and you are starting to see some selling by the commercials, who are typically hedgers.
"For those two reasons, I'm still expecting some kind of a correction that could last a few weeks before we go a lot higher," he said.
Analysts at investment bank UBS said that only when they see gold establish a firm base due to good physical demand will they issue loud calls to buy gold.
"But we do expect the metal to trade higher and forecast the metal at $580/oz in one month and $600/oz in three months," UBS said.
COMEX gold futures hit a 25-year high at $579.50 on Feb. 2, the same day bullion scaled a similar peak of $574.60.
The dollar was largely flat after February U.S. industrial production data came in in-line with market forecasts, but the currency mostly has been declining this week.
Spot gold <XAU=> traded at $554.50/555.20, off from Thursday's late New York level of $555.20/6.10. Friday's afternoon fix reached $555.50.
Over at NYMEX, April platinum <PLJ6> rose $4.40 to $1,035 an ounce. Spot platinum <XPT=> edged up to $1,032/1,036. June palladium <PAM6> climbed $4.65 to $320 an ounce, while spot palladium <XPD=> firmed to $314/318.
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