[miningmx.com] — SPOT silver hit a 30-year peak on Thursday, buoyed by a weak dollar and strength in base metals, while gold held steady below a three-week high hit in the previous session supported by good physical demand.
The dollar weakened broadly, as traders took falls in US bond yields as a cue to sell the greenback.
Spot silver hit a 30-year high of $30.72 an ounce, before easing slightly to $30.68. US silver futures hit $30.79 an ounce, and was trading at $30.71.
The strength in base metals, led by copper, helped buoy silver and platinum group metals, traders said.
Three-month copper on the London Metal Exchange rallied to a record high of $9,469 a tonne.
“Copper prices have been very firm, supporting silver as well as palladium,” said a Hong Kong-based dealer, adding that short-covering in silver also helped push prices higher.
He expected silver to trade in the range of $30 to $35 in 2011, with $40 as a potential target.
“But it will depend on performance of gold and other metals.”
Technical analysis showed that spot silver might be due for a deep correction as the rise was seen exhausted, according to Reuters market analyst Wang Tao.
“A rising wedge is contracting to a point on the daily chart, with a peak likely to form around $32 per ounce, and the RSI indicator shows multiple bearish divergence, which signals a bearish reversal soon,” said Wang.
“A break below a pivotal support at $29 would trigger a deep correction to $25.”
Spot palladium held below a nine-year high of $793.50, trading at $788.49.
Gold prices were still well supported, after breaking above the key $1,400 threshold earlier this week, helped by strong physical demand in Asia.
Spot gold reached $1,413.75, just below a three-week high of $1,413.95 reached on Wednesday, before inching down to $1,412.74 an ounce.
US gold futures were nearly flat at $1,413.3.
In the second-last trading day of the year, investors will keep their eye on the weekly initial jobless claims data from the United States, to gauge the health of the world’s largest economy.
“If the initial claims data comes positive, it could prompt some profit-taking in gold,” said Ong Yi Ling, an analyst at Phillip Futures.
