Silver climbs to 18-year high, gold rallies

Silver climbed to its highest in more than 18 years in Europe on Thursday, tracking sharp gains in gold as investment funds lifted bullion towards a 23-year peak. "It's unstoppable," said Stephen Briggs, economist, SG Corporate and Investment Banking.
"The whole mindset of the market, not just for gold, is just buy, but especially buy the dips." Silver surged to $8.44 a troy ounce, the highest since October 1987, in late afternoon trade before slipping to $8.41/8.43 by 1635 GMT.
The metal, up 30 percent so far this year, mainly followed gold's move closer to $502.97 an ounce, a breach of which would take prices to their highest in almost 23 years.
Spot gold spiked to $502.20 an ounce before easing to $499.90/500.70, compared with $494.10/494.90 in New York late on Wednesday. "I think there is still room on the upside to go," said James Moore, analyst with TheBulliondesk.com. "We are going to probably test up to around $509-$512 before the Christmas holiday period."
Analysts said fundaments had been positive and people were diversifying their portfolios as currencies were not offering strong returns. Inflation worries persisted given firm oil prices.
The metal has also attracted new interest amid geopolitical unease, overall economic uncertainty and expectations that Russia, Argentina and South Africa are friendly to boosting the amount of gold in their reserves.
"The upward trend in the gold price seems likely to continue for a long time," Briggs said.
Gold prices have doubled since touching lows of $254 in 2001 and have gained more than 15 percent this year.
Some industry officials said gold might exceed its all-time high of $850, achieved in 1980.
"For the New Year, increased investment demand and geopolitical concerns may spur the metal higher, with targets set at $525 and possibly even higher towards $550," Standard Bank said in a report.
But physical buying fell in many parts of Asia, the leading consumer of gold, at a time when demand normally rises ahead of Christmas and the Lunar New Year.
In other precious metals, platinum fell to a one-week low of $972 an ounce in Asia before rebounding to $987/992 in Europe, against the $975/980 last quoted in New York.
Palladium was at $261/264, compared with $256/260 an ounce in New York.