LONDON: Investors in silver have reaped glittering rewards in recent months as prices have soared, but with most gains driven by speculation rather than industrial off-take, the market could be at risk of a sharp correction. The metal has benefited so far in the second quarter from a recovery in industrial commodities, which has added to the momentum lent by rising gold prices. But if the temperature of the investment markets dips, silver prices could plummet. "The silver market is not as deep or as liquid as the gold market, so if we were to have a change of view on the part of investors, it would cause quite a traumatic price correction," said Stephen Briggs, commodity strategist at RBS Global Banking & Markets. "For as long as investment buying continues, silver will do well," he said. "(But) it is a very risky play." The metal, which is unusual in that it is seen as both an investment vehicle and as a raw material, climbed 14 percent in the first quarter as investors bought it as an alternative to gold, to hedge against dollar weakness and volatility in other markets. As industrial commodities also started to recover in the second quarter, prices have jumped still further. Spot silver traded as high as $16.22 an ounce early on Wednesday, up 43 percent from $11.31 on January 1. Its gains far outstrip gold's 12 percent rise, while the gold/silver ratio has dropped from 78 at the beginning of the year to around 61.

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