* Silver climbs 4 percent, gold up 1 percent
* Oil extends sharp overnight gains
* Copper, steel rise on China demand hopes
* Coming Up: ECB policy meet outcome, US weekly jobless claims (Updates prices)
By A. Ananthalakshmi
SINGAPORE, April 21 (Reuters) - Silver surged nearly 4 percent on Thursday, hitting an 11-month top and lifting gold with it, as commodities rallied on firmer oil prices and optimism over the Chinese economy.
Crude prices rose on Thursday as the International Energy Agency said that 2016 would see the biggest fall in non-OPEC production in a generation, helping rebalance a market that has been dogged by oversupply. O/R
Asian shares climbed to 5-1/2-month highs and the dollar retained gains from the prior session, but the risk appetite failed to dent the safe-haven appeal of precious metals. MKTS/GLOB
Spot silver XAG= rose 3.9 percent to $17.595 an ounce, its highest since May 2015. Gold XAU= rose as much 1.3 percent to a session high of $1,260.
"There is more and more money coming into commodities," said a trader in Shanghai.
"Commodity prices of steel and other industrial metals are up sharply as Chinese economic data has become much better. Precious metals are rising with it, especially silver," he said.
Silver, used widely in manufacturing, has outperformed gold in recent days, helped by a break through chart resistance at its late October high on Tuesday and upbeat data from China.
Recent data from China has showed a surge in new debt fuelling a recovery in factory activity, investment and household spending. This has largely boosted industrial commodities.
London copper hit its highest in almost a month on Thursday, while Shanghai rebar jumped 9 percent to its highest since September 2014.
"Silver and the PGMs (platinum group metals)... will outperform gold and enjoy positive fundamentals," said HSBC analyst James Steel. "Investors recognise these metals may be undervalued to gold."
Platinum XPT= rose 1 percent on Thursday, trading near its highest in eight months. Palladium XPD= climbed to $601.36 an ounce, its highest in a month.
Bullion traders will be eyeing an ECB meeting later in the session for any impact on the dollar. The ECB is not expected to make any policy change at its rate-setting meeting on Thursday.
The focus will also be on U.S. economic data that could affect the Federal Reserve's monetary policy.
PRICES AT 0649 GMT Metal
Last
Change Pct chg
1258.1
14.8
1.19 Spot silver
17.475
0.545
3.22 Spot platinum
1027
11.65
1.15 Spot palladium
596.45
2.95
0.5 Comex gold
1260
5.6
0.45 Comex silver
17.51
0.375
2.19
COMEX gold and silver contracts show the most active months