MW: Gold, silver waver between small gains and losses
Silver comes off 31-year high
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold and silver futures traded with little direction Tuesday, with the conflict in the Middle East and North Africa partially offset by news China tightened interest rates once again, curbing the need to hold precious metals as an inflation hedge.
Gold for June delivery (GCM11 1,434, +0.50, +0.04%) rose 30 cents to $1,433.30 an ounce on the Comex division of the New York Mercantile Exchange.
Silver for May delivery (SIK11 3,845, -4.90, -0.13%) , which rallied 2% in the previous session to settle at a 31-year high, retreated less than 1 cent to $38.49 an ounce.
Strong “investor demand is currently providing the main boost to the price of silver. And given how sharply it has risen, there is at the same time a danger of it overheating and a subsequent correction occurring.” We now see little scope left for it to rise much further, although a brief surge to above $40 is likely,” analysts at Commerzbank said in a note to clients.
Silver is riding twin waves of increased industrial demand and investment demand, and it is the “hot favorite” among precious metals this year, they added.
Silver has gained more than 23% so far this year, compared to gold’s 0.8%.
The world’s largest exchange-traded fund backed by silver, iShares Silver Trust (SLV 37.57, -0.01, -0.03%) , reported Monday a rise in its holdings of 23 metric tons to 11,162 metric tons.
