Silver rose on Friday to match a 22-year high struck on Thursday, boosted by hopes that an exchange traded fund will be approved by US regulators and draw fresh investment to the market.
Silver hit a high of $10.23 an ounce before pulling back as investors, including fund managers in the United States, took profits on a rally that has seen the metal rise 16 percent since the start of the year.
The precious metal was trading around $10.15/10.18 an ounce at 0438 GMT, slightly below $10.18/10.21 in New York late on Thursday.
Spot gold rose as high as $570.50 an ounce, close to a 25-year high of $574.60 traded last month, before retreating to $568.60/569.50 an ounce, steady from New York levels.
Dealers said investors have poured money into silver - used in jewellery, photography and electronics - in expectations the proposed exchange traded fund (ETF) would be approved by the US Securities and Exchange Commission.
ETFs are designed to reflect closely the price of an underlying market or commodity, such as a stock index or gold, and they trade like listed stocks on any exchange.
Sources in late February said the US SEC was reviewing a silver-backed security from Barclays Global Investors called iShares Silver Trust.
But an absence of physical demand suggested that the market would struggle to reach an upside target of $10.50.
"There's no physical buying at all," said Ellison Chu, senior manager at Standard Bank London in Hong Kong.
"The time for the announcement for the ETF is getting closer. Basically, the turnover is very small in silver because all players and traders are very nervous about the price at the moment," he said.
Fresh investment might be needed to push silver prices higher, some dealers said.
"There won't be any physical buyers. It's only a matter of whether investment demand in silver is going to be sustained, whether new money is going to flow into the metal," said a dealer in Singapore.
"We might hit the next big number of $10.50 but you must understand that a 40-50 cent jump seems to be quite expected. We are in a new level. It's like gold crossing the $400 level. Now silver has crossed $10, so it attracts new interest."
Gold, often a safe-haven investment, did not react to two blasts on Friday that rocked Manila just minutes before President Gloria Macapagal Arroyo lifted a state of emergency.
The market did not react either on Wednesday when a car bomb outside the US consulate in Karachi killed an American and at least three other people ahead of a visit to the country by US President George W. Bush.
Benchmark gold futures on the Tokyo Commodity Exchange, currently February 2007, rose 29 yen per gram to 2,164 yen, following on from gains on New York's COMEX market.
"If the blasts happened in some oil facilities, in Europe or the US, then you will see some impact on gold. I think gold will trade in $557 to $573 range next week," said a dealer in Hong Kong.
Platinum rose to its highest in three weeks at $1,061 an ounce. It was later quoted at $1,058/1,063, above $1,050/1,054 an ounce in New York.
Sister metal palladium edged up to $297/302 an ounce from $296/299.
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