(Recasts, adds comments, updates prices)
* Some volatility to persist in silver, analysts say
* Record jump in iShares Silver Trust holdings on Tuesday
Feb 3 (Reuters) - Silver regained momentum on Wednesday as the market’s focus returned to prospects for higher demand for the metal as the global economy picks up, after a sharp slide in the previous session halted a social media-inspired buying spree.
Spot silver was up 1.3% at $26.96 an ounce at 1409 GMT, having earlier risen as much as 2.1%.
A weaker dollar and expectations of strong economic activity, amid easy monetary policy globally, are among the factors that make “a strong argument to see higher silver prices,” and the recent retail-driven buying frenzy “made it much faster than expected,” UBS analyst Giovanni Staunovo said.
While silver tends to move in tandem of safe-haven gold under normal circumstances, silver also closely follows economic cues because of its industrial applications.
“From a fundamental perspective, improving economic activity is an environment where silver tends to do fine,” Staunovo added.
Prices had surged to $30.03 on Monday, their highest since February 2013, after investors attempted to replicate a retail-driven rally in shares of video game retailer GameStop.
Reflecting sentiment, holdings in iShares Silver Trust, the largest silver-backed ETF, jumped by a record 57.8 million ounces, data showed on Tuesday.
The buying spree left silver dealers scrambling to find supplies for retail buyers.
“Silver prices are now finding an equilibrium that better reflects supply-demand fundamentals, with the WallStreetBets mania having simmered down,” said FXTM market analyst Han Tan, referring to a forum on the Reddit social media platform that fueled the retail buying frenzy.
But analysts expect some volatility to continue even though posts on WallStreetBets urged traders to steer clear of silver.
“If silver does not stir higher again, market attention will likely shift back to gold,” HSBC analyst James Steel said.
Spot gold was steady at $1,837.16 per ounce. U.S. gold futures added 0.3% to $1,838.90.
Platinum rose 0.1% to $1,095.50 and palladium rose 0.6% to $2,256.06.
Reporting by Shreyansi Singh and Sumita Layek in Bengaluru; Additional reporting by Bharat Govind Gautam; Editing by Jane Merriman, Alexander Smith and Paul Simao
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