Silver Tops $11 an Ounce for First Time Since 1983; Gold Gains
March 29 (Bloomberg) -- Silver topped $11 an ounce for the first time since 1983, and gold rallied on demand by investors seeking better returns than U.S. equities or bonds. Copper rose to a record.
Silver has surged 57 percent in the past year, and gold reached a 25-year high last month as investors bet precious metals will outperform stocks and bonds. Commodities climbed an average 5.23 percent a year from July 1959 through 2004, compared with 5.65 percent a year for stocks and 2.22 percent for bonds, according to a study by the University of Pennsylvania and Yale University.
``In bull markets, everything makes an all-time high, and silver is going to do so again in the next 10, 15 years,'' Jim Rogers, chairman of Beeland Interests Inc., said today in an interview. He was co-founder of the Quantum hedge fund with George Soros.
Silver futures for May delivery rose 19 cents, or 1.8 percent, to $11.06 an ounce at 12:54 p.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the highest since September 1983. Prices earlier reached $11.09.
Gold futures for April delivery rose $5, or 0.9 percent, to $572 an ounce on the Comex. Prices earlier dropped as much as $6.80. The metal has climbed 33 percent in the past year. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
Investors have been snapping up silver, fueling a 13 percent gain this month, in anticipation of government approval for Barclay Capitals' exchange-traded fund linked to the price of the precious metal. The fund makes it easier to own the metal and a similar gold fund helped spark the Comex rally to $579.50 an ounce on Feb. 2.
`Everybody's Buying'
The Barclays fund must ``buy silver to put it away for each of those shares,'' said Frank Lesh, a trader at Rand Financial Services Inc. in Chicago. ``Everybody's jumping on, and everybody's buying. That's helping gold.''
Record copper prices are helping to boost interest in precious metals, analysts said. Copper for May delivery on the Comex reached today reached $2.442 a pound, the highest ever. Prices have tripled in the past three years, partly on rising demand from China.
``The Chinese are continuing to consume copper and silver, and they're willing to do it any price now,'' said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago. ``You've got a tremendous amount of traditional stock advisers touting commodities.''
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