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PRECIOUS-Silver hits 31-year top, iShares Silver at record

Published 04/04/2011, 11:19 PM
Updated 04/04/2011, 11:24 PM
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* Silver hits highest since early 1980

* iShares Silver Trust holdings hit record

* Coming Up: U.S. ICSC chain stores yy Weekly; 1145 GMT (Updates prices, adds quotes)

By Lewa Pardomuan

SINGAPORE, April 5 (Reuters) - Silver jumped to its highest since early 1980 on Tuesday on inflation concerns, a rise in ETF holdings to another record and growing industrial demand, while gold hardly moved as the euro held below this week's five-month high versus the dollar.

In addition to rising investment demand for silver as a cheaper alternative to gold, an expected increase in physical buying from China was likely to support the metal, which gained 22 percent in the first quarter -- its ninth consecutive quarterly increase.

Silver , widely used in electronics manufacturing, rose as high as $38.73 an ounce and was quoted at $38.64 an ounce by 0301 GMT, up 22 cents.

"We do see a lot of demand for silver from China, so we think silver used in solar panels have increased. We think China will have a lot of demand for silver in the medium to long term," said Natalie Robertson, commodities strategist at ANZ in Melbourne.

"With China focusing more on renewable energy, especially after the nuclear crisis in Japan, they will probably be developing a lot more solar panels. Fundamentally, the silver picture looks very strong as well."

IShares Silver Trust said its holdings rose to a record at 11,162.45 tonnes by April 4 from 11,139.52 tonnes on March 24. [ID:nL3E7F5019]

But some analysts remain wary of silver's extreme volatility, which has led to some heart-stopping reversals in recent years. When commodities sold off heavily in mid-March, silver dropped nearly 5 percent in a single day, versus gold's 2 percent fall. For BUY OR SELL, click: [ID:nLDE7331DB]

Gold added 30 cents to $1,436.85 an ounce -- below a lifetime high around $1,447 an ounce struck last in March. Trading was slow, with financial markets closed in Hong Kong and mainland China.

"I think China has turned to silver jewellery since last year because it's cheaper. I do see demand for silver from China for jewellery and I also heard China is buying silver for hedging purposes," said a physical dealer in Singapore.

"Gold is very quiet, although I do see light physical buying from Thailand."

U.S. gold futures for June rose $4.5 an ounce to $1,437.5 an ounce.

The euro held below this week's five-month high against the dollar and 11-month peak versus the yen as investors paused to assess how much it can make in fresh gains given that expectations for interest rate rises have largely been priced in.

The Nikkei slipped on Tuesday with the mood soured by Tokyo Electric Power's fall to an all-time low, but was set to stick to a tight range for a third day as a post-quake rebound looks to have run its course.

U.S. crude oil futures slipped early Tuesday, but still hovered around the Monday's 2-1/2 year high as geopolitical risks amid fighting in Libya, unrest in Yemen and stalled elections in Nigeria continued to support prices.

Precious metals prices 0301 GMT Metal             Last    Change  Pct chg  YTD pct chg  Turnover Spot Gold        1436.85    0.30   +0.02      1.23 Spot Silver        38.64    0.22   +0.57     25.21 Spot Platinum    1792.74   13.29   +0.75      1.43 Spot Palladium    784.25    4.75   +0.61     -1.91 TOCOM Gold       3905.00   28.00   +0.72      4.72        29054 TOCOM Platinum   4893.00   81.00   +1.68      4.20        10616 TOCOM Silver      105.00    1.90   +1.84     29.63         1880 TOCOM Palladium  2138.00   31.00   +1.47      1.96          175 Euro/Dollar       1.4197 Dollar/Yen         84.32 TOCOM prices in yen per gram. Spot prices in $ per ounce. (Editing by Himani Sarkar)

Reuters Terminal users can see related news and prices by double clicking on the codes in brackets: - All precious metals headlines - Precious metals market reports - Daily fixing headlines - Technical analysis - Indian gold reports - European gold prices <0#PREC> - London interbank gold forward rates <0#GOFO=> - London silver forwards - Gold lease rates <0#LGLR=> - London Bullion Market Association - New York Comex gold <0#GC:> and silver <0#SI:> - New York platinum <0#PL:> and palladium <0#PA:> - Asian gold prices <0#PREC> - Australian precious metals prices <0#AUPREC=> - Shanghai Gold Exchange prices - Hong Kong gold exchange prices - Hong Kong bullion prices - Indian bullion prices <0#PREC-IN> - Japanese producer prices For Related News and other topics, double click on one of these codes: SPEED GUIDES

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