US silver futures vaulted to a 22-year high on Thursday, amid aggressive commodity fund buying that boosted the precious metal over $10 an ounce ahead of a widely expected approval of a silver exchange-traded fund (ETF), sources said.
"I think the market certainly positioned itself for that and as we got closer to that $10 mark, it just became irresistible and the stops went off and some fresh buyers came in," said Bernard Hunter, director of precious metals at ScotiaMocatta.
Silver for May delivery surged 4.3 percent, or 41.8 cents, settling at $10.208 an ounce at the COMEX division of the New York Mercantile Exchange, after dealing from $9.76 to $10.225, its loftiest level since early 1984.
"There was some more talk around during the day that the Securities and Exchange Commission is over its supposed guidance period for passing back comments and there was no news, so people were thinking maybe a decision must be imminent," Hunter added.
Investors were anxious to build long positions above $10 an ounce in expectation that the proposed silver ETF would be approved by the Securities and Exchange Commission, following the end of a 21-day public comment period on the ETF, ordered by the SEC.
Spot silver shot up to a 22-year high at 10.23 amid fund buying that was tied to the gains seen in the copper market, dealers said.
It last fetched $10.18/10.21, well above $9.75/78 late Wednesday. The daily spot reference rate was fixed at $9.7875 in London. George Gero, vice president at RBC Capital Markets Global Futures noted that the metal has turned respectable and has attracted institutional interest since it had passed the 100,000 open interest mark.
As of March 1, open interest in the silver market was up 263 lots at 128,102 lots.
COMEX gold ended higher on the coattails of the firmer silver market, dealers said.
Gold for April delivery settled $4.60 firmer at $570.40 an ounce, moving between $563.70 and $570.80, its highest level since February 10.
Benchmark futures peaked at $579.50 on February 2, before profit-taking pressured prices to a low at $537.80 on February 14. Spot gold rose to $568.30/9.20, from Wednesday's New York close at $563.40/564.30. Thursday's afternoon fix by London bullion dealers was set at $564.25.
Benchmark April gold has risen nearly 8.1 percent since the beginning of the year amid safe-haven buying fuelled by geopolitical tensions, dollar weakness, and rising inflation fears due to higher energy prices.
NYMEX April platinum ended up $3.00 to $1,054.80 an ounce. Spot last fetched $1,050/1,054. June palladium gained $3.05 to $303 an ounce. Spot palladium was quoted $296/299.