US benchmark silver prices slid off a 22-year high Wednesday as a sharp rally dried up despite Tuesday's news that a first silver-backed security looked closer to final US regulatory approval, dealers said.
In other precious metals, gold extended losses due to a firm dollar early in the day and soft crude oil that combined to limit demand for the metal as an alternative investment.
Platinum advanced on expectations of increased metal demand from Japan, while palladium also ended higher.
Silver for May delivery at the New York Mercantile Exchange's COMEX division fell 7.0 cents to $10.4950 per ounce, after trading from $10.4750 to $10.60, which had marked the highest price for futures since October 1983.
"The market was kind of subdued and silver today was nervously drifting around in a new higher range," said a trader at a precious metals refiner.
Markets were absorbing a Securities and Exchange Commission announcement that it approved rule changes allowing the American Stock Exchange to list shares in Barclays Plc's iShares Silver Trust, which is designed to track the silver price.
In order for the iShares Silver Trust to actually begin trading, the SEC would have to declare effective a registration statement allowing the shares to be publicly issued.
But, analysts said, the news paved the way for approval of the Trust, which would be backed by bullion stored in vaults.
Dealers said the security should attract new investment to the market and soak up much of the available silver supply.
Nonetheless, prices got capped by stiff chart resistance at the overnight high of $10.60 an ounce, even though many players expected silver to soon test the $11 area and possibly even $12 at some point.
Spot silver fell to $10.48/10.51 late in New York, from $10.53/56 on Tuesday. London bullion dealers fixed the spot reference rate up 2.4 percent at $10.53 on Wednesday.
Gold limped down on technical weakness and currency-based selling, traders said, with action in futures dominated by speculator rollover into back-month contracts before April delivery period begins next month.
"It has a weakish tone to it, but we're still above the $550 level, I think because of silver," said a trader. "Otherwise, I think we'd be $10 lower."
COMEX April gold drifted off $1.50 to $551.70 an ounce, after moving in a range of $554 to $547.30.
On February 2, COMEX gold shot to a 25-year high at $579.50, while spot gold rose to a similar peak at $574.60. Spot gold dipped to $550.20/551.10 an ounce, compared with its previous New York close at $551.80/552.70. The late London fix reached $550.75.
Over at NYMEX, April platinum rose $10.30 to $1,046 an ounce, lifted by spec buying and amid rollover into the July contract. Spot platinum climbed to $1,042/1,046.
Japan plans to expand the scope of its rare metal reserves to include platinum, indium and rare earth metals for the first time as worries grow about global supply shortages, Kyodo news agency reported on Wednesday.
June palladium gained $7.90 to $325.95 an ounce. Spot palladium last hit $321.50/325.50.
Comments
Comments are closed.