Silver hits 31-year high as investment recovers

LONDON: Spot silver rose to a 31-year high on Friday after investors took advantage of January's 9 per cent price fall to buy into the market, with precious metals demand fuelled by ongoing unrest in the Middle East region.
At 0932 GMT silver was $31.84 an ounce, just off $31.95, its highest since 1980, and compared with a bid of $31.74 in New York late on Thursday. The metal has risen 14 per cent so far this month.
"It certainly seems to be leading the precious metals complex, and the investment interest in those markets has got a lot stronger," said William Adams of Basemetals.com.
"At the retail end of the market it's cheaper. If you want to buy into bullion, a way in is via silver. That's one of the reasons why it's outperforming gold."
The gold:silver ratio - the number of ounces of silver needed to buy an ounce of gold -- dropped to its lowest in 13 years at around 43.5 on Friday as silver prices outperformed.
Holdings in the world's largest silver-backed, exchange-traded fund, iShares Silver Trust , edged up to 10,438.56 tonnes by Feb. 17 from 10,411.23 tonnes on Feb. 14.
Gold hit its highest in five weeks on Friday, heading for its best weekly gain since early January, on inflation fears sparked by rising oil prices and Middle East tensions.
Spot gold hit a high of $1,388.15 an ounce on Friday, its strongest since January 13.
"I think there is still a bullish big picture for gold and silver, but I wouldn't be surprised to see a bit of a correction first," Adams said. "But I think over the next year or so I'm bullish on precious metals."

(Source: http://economictimes.indiatimes.com/markets/commodities/silver-hits-31-year-high-as-investment-recovers/articleshow/7521702.cms)