LONDON: Silver hit a 2-1/2 year low yesterday, led by fund liquidation in Asian trade, while gold was up slightly, reversing from seven days of losses based on speculation the US Federal Reserve may rein in its stimulus program.
Investors have been dumping gold and silver, which are down 20 percent and 30 percent respectively this year, while stocks and the dollar have risen on an improving global economic outlook.
Gold-backed exchange-traded funds have seen massive outflows in recent months, although silver holdings have held up better until now.
Silver was down 1.5 percent at $ 21.90 an ounce by 1451 GMT, after touching $ 20.84, its lowest since September 2010. COMEX silver futures were down 3 percent to $ 21.69 an ounce, having earlier dropped as much as 9 percent.
More than 3,000 lots were sold in Comex silver futures in just 20 minutes of early Asian trading yesterday, Reuters data showed.
The gold-silver ratio is at its highest level since September 2010, with an ounce of gold currently buying 63 ounces of silver. That is twice as much as in April 2011, when silver was trading considerably higher.
Comments from US Federal Reserve officials and positive US data have boosted talk the bank may reduce its monetary easing measures, which had supported gold in recent years by holding down interest rates and undermining the dollar.
Gold hit a low of $ 1,338.95 an ounce earlier yesterday, its weakest since April 16, when worries that European central banks might liquidate gold reserves and a break through the technical level of $ 1,525 an ounce prompted a sell-off.
Spot prices erased losses and were up 0.3 percent to $ 1,363.10. U.S. gold futures were still down 0.2 percent to $1,361.
In other precious metals, platinum fell 0.3 percent to $ 1,446.24 an ounce. Palladium turned higher after a lower start at $ 736.97 an ounce.
Silver price hits 30-month low; stocks and dollar rise
