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Silver jumps to new highs, platinum hits record
LONDON, Jan 25 - Silver prices spiked to fresh 18-1/2-year highs in Europe on Wednesday as talk of setting up a new exchange-traded fund spurred fund buying, while platinum hit a new record high. Gold also picked up and moved closer to last week's 25-year high after consolidating in previous trading sessions, with the market tone remaining bullish on worries about inflation and economic growth, dealers said.
"I think there has been buying ahead of any solid news on whether or not the exchange-traded funds will be approved," said Yingxi Yu, precious metals analyst at Barclays Capital.
Spot silver rose as high as $9.39 an ounce but eased to $9.37/9.40 an ounce by 1108 GMT, compared with $9.17/$9.20 late in New York on Tuesday.
The Securities and Exchange Commission is considering a proposal to allow setting up of a silver exchange-traded fund (ETF), Barclays said in note.
Gold ETFs are already functioning and have generated good interest. These products, traded on some of the world's major stock exchanges, give investors a share of a bar of gold. Analysts say the five gold ETFs now hold 400 tonnes of gold.
"Silver has lagged gold this year so some sort of catch up was inevitable," said John Reade, analyst at UBS Investment Bank.
PLATINUM AT RECORD HIGHS
Platinum surged to its highest ever level of $1,054/1,058 an ounce from $1,047/1,051 in New York as positive fundamentals lifted fund buying.
Demand for the metal, mainly used in autocatalysts to filter out carbon monoxide and harmful particles from exhausts, has been growing because of tighter emission standards worldwide, dealers said.
Supplies of platinum are expected to rise in South Africa, the biggest producer, but a strong local currency has raised operating cost and threatened new projects, analysts said.
"Whilst the market is so incredibly bullish towards metals and speculators and investors are basically buying anything which is shiny, then I think platinum can keep grinding higher," Reade said.
Spot gold was at $561.80/$562.60 an ounce, compared with $558.20/$559.00 in New York and below Friday's 25-year high of $567.60.
Gold has risen nearly 10 percent since the start of 2006.
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