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PRECIOUS-Silver surges to near 6-month peak on retail frenzy

Published 01/02/2021, 12:15 pm
Updated 01/02/2021, 12:18 pm
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Feb 1 (Reuters) - Silver soared as much as 7.4% to climb a nearly six-month peak on Monday, after social media posts last week called for retail investors to flood into the market and push up prices of the precious metal.

FUNDAMENTALS

* Spot silver XAG= hit its highest since Aug. 11 at $28.98 an ounce, and was up 5.4% to 28.45 by 0049 GMT.

* Silver has risen nearly 15% since Thursday, when posts began circulating on Reddit urging retail investors to buy silver mining stocks and iShares Silver Trust SLV , an exchange traded fund (ETF) backed by physical silver bars, in a GameStop-style squeeze. Buying an ETF can boost silver prices by increasing the number of shares in the fund and making its operator buy more metal to back them.

* The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, fell to its lowest since 2014.

* Speculators upped their bullish positions in COMEX gold and silver contracts in the week to Jan. 26, data showed on Friday. Spot gold XAU= rose 0.3% to $1,852.35 per ounce. U.S. gold futures GCv1 gained 0.3% to $1,856.30.

* Meanwhile, 10 moderate Republican U.S. senators urged President Joe Biden on Sunday to significantly downsize his sweeping $1.9 trillion COVID-19 relief package. Elsewhere, platinum XPT= eased 0.1% at $1,072 and palladium XPD= shed 0.2% to $2,222.46.

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