SAN FRANCISCO (MarketWatch) — Silver futures climbed to their highest level in about 31 years Friday, posting a nearly 8% gain for the week on bets that industrial and investment demand for the metal will remain strong, as gold marked a five-session winning streak on growing tensions in the Middle East.
Gold prices finished the week higher as investors sought a safer bet in the wake of intensifying violence among demonstrators and security forces in Bahrain and amid reports that Egypt has agreed to allow the passage of Iranian naval ships through the Suez Canal.
“The metals markets are sprinting toward new highs and breaking through key resistance not seen for a very long time, especially in silver,” said Kevin Kerr, editor of Kerr Commodities Watch.
“Widespread unrest in the Middle East and elsewhere, as well as growing inflation concerns globally, are pushing more and more investors into the precious metals as a hedge,” he said.
Silver for March delivery(SIH11 3,262, +72.60, +2.28%) tacked on 73 cents to close at $32.296 an ounce on the Comex division of the New York Mercantile Exchange. It ended 7.8% above last Friday’s closing level of $29.995.
Silver futures are trading at levels not seen since March 1980, according to Phil Flynn, vice president at PFG Best.
And a rally in both silver and gold “could be exponential if tensions and uncertainty continue to grow and I think silver will clearly outpace gold on a meteoric rise,” said Kerr. Read about why silver’s rally is built to last.
“All the stars are aligning for a new high in silver and possibly gold,” he said. “On top of all of this increased borrowing from the ECB and a real worry about Ireland, Portugal, Greece, and even Spain are causing many to flee into silver and gold as well.”
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