Silver reaches 19-year peak

London: Silver scaled a new 19-year high yesterday as funds snapped up the metal on talk of a silver exchange-traded fund (ETF) getting closer to approval, while platinum hit another record peak.

Gold hovered just below last week's 25-year high of $567.60 an ounce after facing tough resistance the previous day in breaking that level, but overall sentiment remained upbeat

following continued interest of investors in commodities.

"The market feeling is that if the ETF gets launched, then it could absorb a lot of silver," said London-based Alan Williamson, head of commodity research at HSBC Bank.

He said silver inflows into the fund, if launched, would have potential to sharply lift prices.

Silver hit a high of $9.53 an ounce before easing to $9.51/$9.54 by 1110 GMT, compared with $9.44/$9.47 in New York late on Wed-nesday.

The metal, used in jewellery and electronics, gained seven per cent this year, on top of a 30 per cent rise in 2005.

Barclays Global Investors said its silver-backed security iShares Silver Trust appeared to move a step closer to approval after the US Securities and Exchange Commission issued a filing about its potential listing on the American Stock Exchange.

The exchange traded funds (ETFs), aimed at drawing investment capital, are designed to reflect the price of specific goods and trade like listed stocks on any exchange.

Gold ETFs already are traded on some of the world's major stock exchanges and all such funds now hold 400 tonnes of gold. "If only one-fifth of the money which went into the gold ETFs would go into silver, it would be an amount of 4,500 tonnes. This is obviously massive," said Wolfgang Wrzesniok-Rossbach, head of precious metals marketing at Germany's Heraeus.

Dealers said record-high copper prices would also offer support to silver, which is both an industrial as well as a precious metal.

Silver would now aim for $9.65, the high from May 24, 1987. The metal peaked at $9.80 that year.

Copper prices showed no signs of slowing down in early trade yesterday, moving above $4,800 to a new record peak after gains of three per cent the previous day.

Other metals were also bubbling, with aluminium just off a 17-year peak, while zinc and lead hovered near all-time highs.

"I won't be surprised if silver continuously makes new highs. Obviously some of these guys who have invested in gold will be looking at other metals as well such as silver, platinum and palladium," said a dealer in Singapore.

Platinum spiked to an all-time high of $1,060 an ounce but eased to $1,059/$1,063 against $1,057/$1,060 in New York.

"With clear skies above on the charts as well as positive fundamentals and strong investment demand, the white metal has plenty of scope for further gains in the coming sessions," James Moore of TheBullionDesk.com said in a daily note.

Spot gold was quoted at $561.20/$562.10 an ounce, compared with $562.20/$563.10 last quoted in New York.

Palladium dipped to $276/$280 an ounce from $279/$282 in the US market, when it gained $6.