April 28, 2011 / 4:05 PM / 8 years ago

Instant View: Silver rises to record, beats 1980 high

NEW YORK (Reuters) - Silver surged nearly 4 percent on Thursday to an all time high at $49.51 an ounce, exceeding the previous record set in 1980 as a dollar drop and gold’s record rally unleashed a wave of speculative buying.

Silver climbed on the back of a tumbling dollar and surging gold prices to within a whisker of $50 an ounce, eclipsing the peak hit when Texan brothers William Hebert and Nelson Bunker Hunt sought to corner the silver market three decades ago.

TRADER/ANALYST COMMENTS:

ANDREW WILKINSON, SENIOR MARKET ANALYST AT INTERACTIVE BROKERS GROUP IN GREENWICH, CONNECTICUT

“Precious metals prices rebounded sharply on Thursday in light of the weak jobless data and a poor U.S. GDP report. The dollar is not seeing much of a reprieve from its earlier weakness, a signal to bearish investors to get long gold and silver.”

ADAM SARHAN, CHIEF EXECUTIVE OF SARHAN CAPITAL IN NEW YORK:

“What’s we’re seeing is a very strong and sustained bid for silver, an overwhelming desire for people to be involved in the silver trade. That strength begets more strength. It becomes a self-fulfilling prophesy as more and more people get involved.

“I’d say that it is premature to call it a bubble, but there’s a bubble-eqsue feel to the move. At this stage, you don’t want to fight the trend. How much higher could it go? No one knows, but there’s no overhead resistance.”

BART MELEK, VICE PRESIDENT AND DIRECTOR OF COMMODITIES, RATES RESEARCH & STRATEGY, TD BANK FINANCIAL GROUP:

“Ultimately, what we are seeing here is a market that has continued to be buoyed by yesterday’s Bernanke statements, which were interpreted to be quite dovish.

“The U.S. dollar continues to soften, and gold and silver continue to be used as hedges against this type of risk. The benefit that silver is getting is that it seems to be underpriced relative to historical highs in real terms. When you take real current dollars and adjust for inflation, the all-time silver high was about $140 plus.

“Gold is certainly much closer to its real high than silver, so if this market is to move, silver will perhaps be more aggressive and outperform gold, and that’s exactly what we are seeing.”

DOUGLAS BORTHWICK, MANAGING DIRECTOR OF FAROS TRADING IN STAMFORD, CONNECTICUT:

“This is a dollar story. It’s not about the euro or the Aussie at $1.09 or gold at $1,534 or silver at a record. It’s not about the price of these things. It’s just about the dollar being worth less. But it has to be worth less for the U.S. to get out of the prolonged slump we are in.”

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