Silver climbed to the highest price since 1980 in London as investors sought a protection of wealth in the metal that may also benefit from economic growth. Gold reached a record. Silver has advanced 26 percent this year, outperforming gold, global equities, Treasuries and most industrial metals. Batteries and other industrial uses account for about half of silver demand, according to researcher GFMS Ltd. Gold, which usually moves inversely to the dollar, reached an all-time high for the fourth day this week as the dollar declined. “The gold traders and investors are looking at silver,” said Jesper Dannesboe, a senior commodity strategist at Societe Generale SA in London. “They think it’s cheap, and now they’re piling into the silver market. Silver is really about hot money. It may have several more dollars to go.” Silver for immediate delivery in London added as much as 1.2 percent to $21.3875 an ounce and traded at $21.3425 at 10:19 a.m. in London. Silver futures for December delivery climbed as much as 1 percent to $21.43 an ounce, the highest level since March 2008, and last traded at $21.38 on the Comex in New York. The metal, used to create the first telegraph messages, is heading for a seventh quarterly advance in London. That’s the best streak since 1974. Prices reached an all-time high of $50.35 an ounce in New York in 1980, a year after the Hunt brothers tried to corner the market. Interest Rates “There are other drivers such as industrial uses, for those who believe in the economic recovery,” Dannesboe said. Precious metals have gained this year as central banks and governments maintained low borrowing costs and spent trillions of dollars to stimulate their economies. The dollar slipped to a five-month low against the euro on Sept. 22 after the Federal Reserve left its benchmark interest-rate target at a record low and pledged to take more steps to spur growth if necessary. The greenback fell as much as 0.6 percent today. Investors have grappled with conflicting reports about the strength of the economy. While a report yesterday showed U.S. home sales were slightly stronger than economists had forecast, the number of Americans seeking unemployment benefits unexpectedly rose in the latest week and Europe’s services and manufacturing industries slowed this month more than economists forecast. ETP Assets Global holdings of silver in exchange-traded products were 13,497.72 metric tons as of yesterday, the most in at least seven months, data compiled by Bloomberg from four providers show. Assets in the iShares Silver Trust, the biggest ETP backed by silver, jumped 73.04 tons to a record 9,582.59 tons yesterday, according to figures on the company’s website. An ounce of gold bought as little as 60.669 ounces of silver today in London, the least since October last year, according to Bloomberg data. The ratio fell as low as about 43.57 in 2006 and has averaged about 61.79 this century. “Risk aversion on a slew of poor U.S. and European Union economic data, the climb higher in the gold price plus strong industrial demand have seen the silver price clearly outperform gold since late March,” analysts at VM Group said in a report last week. Gold has added 17 percent since the end of March, compared with silver’s 22 percent gain. Gold is up 18 percent this year in London and today reached a record $1,298.38 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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