Silver soared to an all-time high on Thursday and gold rose to another record, as the dollar fell and as signs that the Federal Reserve would maintain a loose monetary policy stoke inflation worries. Silver briefly climbed to within a whisker of $50 an ounce, eclipsing the peak hit when Texan brothers William Herbert and Nelson Bunker Hunt sought to corner the silver market three decades ago. The metal later pulled back on technical selling.
Option traders reported strong buying of long-dated in-the-money silver calls, indicating bullish investor expectations. Also, the value of gold in terms of silver fell to less than 32 ounces on Thursday, the lowest on record according to Reuters data dating back to 1982.
"We saw this morning weakness in the US GDP numbers and a rise in the inflation data in primarily food and gasoline prices. This led to the weakness in the dollar which caused investors to turn to silver and gold as a hedge against inflation," said Herb Kurlan, president of VTrader Pro, a proprietary trading firm.
Spot silver, which has rocketed nearly 60 percent so far this year, rose 1.6 percent to $48.53 an ounce by 3:29 p.m. EDT (1929 GMT), having earlier hit a record $49.51 an ounce, surpassing a peak of $49.48 on January 18, 1980 set during the Hunt brothers era. A US jury found that the Hunt brothers conspired to manipulate the prices of silver in 1979-80. During that time the price of US silver futures soared from below $11 an ounce to a record $50.35, then tumbled back to around $11.
Spot gold rose to a lifetime high of $1,538.35 an ounce, breaking records for the ninth time in 10 sessions. It was later up 0.6 percent at $1,535.60 an ounce, up 0.6 percent. US June gold futures settled up 0.9 percent at $1,531.20. Silver has surged 11 percent in just the last two days, even after Monday's technical failure that almost sent prices toward $50 before pulling back sharply. Year to date, silver was up almost 60 percent, currently the best performing commodity, sharply above gold's 8 percent gain. In platinum group metals, platinum gained 0.8 percent to $1,834.40 an ounce, while palladium rose 1.3 percent to $773 an ounce.
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