Silver and other precious metals futures rebounded in choppy trading on Thursday after US regulators approved the first silver-backed security that traders expected would hoist investment demand.
Silver briefly surged about 2 percent after the Securities and Exchange Commission said it had approved a registration statement for a exchange-traded fund from Barclays Global Investors called iShares Silver Trust.
That decision removed the final regulatory obstacle to trading in the innovative fund. Silver and other metals were gyrating wildly by midmorning with market players reluctant to put on large positions as they digested the ETF news.
Silver for July delivery on the New York Mercantile Exchange's COMEX division rose 9.1 cents at $13.03 per ounce by 11:11 am EDT, trading a wide range of $12.3150 to $13.25. Nearby May silver was up 9.5 cents to $12.95.
Silver, used in jewellery, fabricated products and industrial applications, reached a 23-year high last week in futures at $14.69 on anticipation of the ETF launching soon.
IShares Silver Trust is designed to track the price of silver bullion that will be stored in vaults in allocated accounts and trade like listed shares on an exchange. Silver prices had earlier dropped about 4.5 percent Thursday as gold and the precious group fell after China surprised global markets by raising interest rates,
Spot silver by midmorning rose to $12.99/13.09 an ounce, against $12.92/13.02 on Wednesday. Thursday's fix was at $12.52.
George Gero, vice president of RBC Capital Markets Global Futures, said an early flurry of liquidation in gold and the precious group was sparked by worries over the China news.
COMEX June gold gained $2.50 to $644.50 an ounce, dealing between $627 and a session peak of $646.20.
That peak fell just short of last Thursday's 25-year high at $649, fuelled by weeks of investment buying amid tensions over Iran, high energy prices and uncertainty over the US dollar.
Spot gold was worth $640.40/641.40 an ounce, vs. $640.10/1.10 an ounce late Wednesday in New York.
NYMEX July platinum rose $11.80 to a new record high of $1,159.80 an ounce. Spot platinum reached 1,147/52.
June palladium fell $3.65 to $365.50 an ounce. Spot palladium last fetched $362/367 an ounce.
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