Silver Tops $42, Extends Rally to Highest Since 1980, on Inflation Concern

Silver futures topped $42 an ounce, extending a rally to the highest since 1980, on mounting demand for the precious metal as a hedge against inflation.

U.S. wholesale costs increased 0.7 percent in March, led by surging energy, the government said. Compared with a year earlier, prices climbed 5.8 percent. Silver reached $42.21, the highest in 31 years, and has climbed 36 percent this year, the biggest gain among the 19 raw materials in the Thomson Reuters/Jefferies CRB Index.

“Inflation is back in vogue,” said Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago. “There’s a lot of pent-up buying interest, and when silver began to make a move earlier today, there was a scramble to back into the market.”

Silver futures for May delivery traded at $42.085 at 4:33 p.m. in electronic trading on the Comex in New York. Earlier, the price rose $1.427, or 3.5 percent, to settle at $41.664. That gain was the biggest since Dec. 28.

The metal reached a record $50.35 in 1980.

Gold futures for June delivery rose $16.80, or 1.2 percent, to close at $1,472.40 an ounce. The price reached $1,475.90 after the settlement. The record high was $1,478 on April 11.

Based on the closing price, the metal has gained 3.6 percent this year.

(Source: http://www.bloomberg.com/news/2011-04-14/silver-tops-42-extends-rally-to-highest-since-1980-on-inflation-concern.html)