APRIL 25, 2011, 9:07 A.M. ET
PRECIOUS METALS: Silver Shoots To Record With Gold As Dollar Falls
By Matt Whittaker
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Silver futures surged Monday to a record high and gold inched to its own highest-ever price as investors sought the metals as an alternative to the U.S. dollar.
The most actively traded silver contract, for May delivery, touched a record $49.820 a troy ounce and was recently up 4.2% or $1.956, at $48.015 per troy ounce. The thinly traded nearby April contract hit $49.105, just shy of its 1980 record of $50.360 around the time the Hunt brothers from Texas attempted to corner the silver market.
"Concerns about the dollar have produced a big run into the metals," said Sterling Smith, an analyst with Country Hedging.
Silver was far outpacing gold's gains as the gray metal continued to benefit from its relative cheapness compared with gold.
Comex June gold was recently up $8.70, or 0.6%, at $1,512.50 a troy ounce after hitting a record intraday peak of $1,519.20. Nearby April gold was up $7.90, or 0.5%, at $1,511.10 after hitting its own intraday record $1,518.00.
Investors tend to favor gold and silver as hedges against currency volatility and a store of value in times of weakening currencies. The dollar-denominated metals also tend to rise when the dollar falls because that makes them less expensive for foreign buyers, helping demand.
The greenback has been under pressure recently on investor perception that the U.S. Federal Reserve will maintain low interest rates for some time. The ICE Futures U.S. Dollar Index was recently down 0.1%.
Investors will be focused on the Federal Open Market Committee meeting Tuesday and Wednesday and the subsequent news conference by Fed Chairman Ben Bernanke.
Some expect the Fed to signal that in June it plans to end its controversial strategy of buying $600 billion in U.S. Treasury bonds to spur the economy. Others think there is only an outside chance of this happening.
The dollar was also under pressure Monday on reports that central banks in Malaysia and Indonesia were selling their currencies to keep them from rising too fast, indicating that the dollars bought will be sold later on for other currencies.
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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