Silver hits 22-year highs, lifts platinum and palladium
Silver hits 22-year highs, lifts platinum and palladium Mon Mar 27, 2006 8:21 AM GMT
SINGAPORE (Reuters) - Silver rose to its highest level in more than 22 years on Monday, driven by expectations of more demand for the precious metal, but gold failed to sustain last week's gains and capitalise on a weaker dollar.
Silver's gains pushed up platinum to a three-week high and palladium to its highest in nearly two years.
Spot silver breached a key resistance of $10.80 and rose as high as $10.82 an ounce, its highest since September 1983, before easing to $10.78/10.81 an ounce. That was still higher than $10.72/10.75 late in New York on Friday.
"There will more fresh money coming into silver but one must always be vigilant. Everyone is now talking about the much-dreaded pullback but so far we haven't seen anything yet," said a dealer in Singapore.
"You have no choice but to play up the market. You are going to see the breakdown in some other metals before you can be bearish," he said.
Silver has risen on expectations a silver-backed security will soon attract demand for investment in the metal, which is mainly used in jewellery, photography and electronics. It has gained more than 22 percent in value this year.
The U.S. Securities and Exchange Commission last Tuesday appeared to have paved the way for final approval of the first silver exchange-traded fund (ETF) that tracks the metal's price.
Some analysts said the fund had potential to attract up to 4,000 tonnes of silver, which would be equivalent to nearly two months of consumption.
Platinum rose to its highest in three weeks to $1,054 an ounce before retreating to $1,053/1,058 an ounce, higher than $1,045/1,049 in New York.
Sister metal palladium rose to $330/335 an ounce from
$328/333.
Spot gold eased to $559.80/560.60 an ounce from $560.00/560.90 an ounce late in New York, and remained below a two-week high of $560.70 hit on Friday.
Gold shrugged off the first day of trading of Taiwan's first gold futures contract and comments from a Bank of China official that China should use part of its fast-growing foreign exchange reserves to buy gold "Gold is left behind, that's all," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"There's a little bit of buying interest here but not very strong, I would say," said Leung, who expects gold to trade in a tight range of $558 to $561 an ounce on Monday.
Benchmark gold futures on the Tokyo Commodity Exchange, currently February 2007, rose 20 yen per gram to 2,128, tracking gains in New York's COMEX.
The dollar dropped as investors waited to see whether the Federal Reserve will keep rasing its key rate after an expected interest rate rise at this week's meeting.
The Fed begins a two-day meeting on Monday and is widely expected to lift rates to 4.75 percent from 4.5 percent in what would be the 15th straight increase in its campaign that helped boost the dollar 15 percent against the euro and yen last year.
The dollar fell to 116.47 yen from an intraday high of 118.50 on Friday. The euro was slightly higher against the dollar around $1.2055.
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