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Silver surges 5 percent on dollar and
gold at record

(Reuters) - Spot silver surged more than 5 percent to top $49
ounce on Monday, moving closer to its 1980 all-time peak lifted
by a weak dollar and strong physical demand in Asia that also
sent gold to a record high for a seventh consecutive session.

Spot silver was heading for its biggest daily gain in five months, hitting a
31-year high of $49.31 an ounce. It was trading at $49.07 as of 5:45 a.m. ET.

Spot gold hit a record high of $1,518.10 an ounce, before easing to
$1,517.05. U.S. gold futures hit an all-time high at $1,518.6.

"Everyone is buying," said a Hong Kong-based dealer. "There is stop-loss
buying, as well as a good buying interest from China."

U.S. silver futures jumped 8.2 percent to $49.82 an ounce in unusually
large trading volume, just about 50 cents off its all-time peak of $50.35 hit
on January 18, 1980. They stood at $49.11 as of 5:42 a.m. ET.

Silver prices have climbed nearly 60 percent this year, after jumping more
than 80 percent in 2010.

That has outpaced gold's 7 percent rise and a 10-percent gain in the
19-commodity Reuters-Jefferies CRB index and drawn investors big and
small to silver.

Holdings in the largest silver-backed exchange-traded fund, iShares Silver
Trust, have risen by 2.4 percent this year, while holdings in SPDR Gold
Trust, the world's top gold ETF, have declined by 4 percent.

Buying interest in physical silver has also jumped in India, where gold is
traditionally favored.

"The rally has been great as traders are buying silver like mad," said an
official at a private bank in India.

"We normally don't import silver on a regular basis, but we imported about
10 tonnes from last month. Investors are joining in the rally in India to
catch on the price appreciation."

"It's the dollar play," said a dealer based in Singapore.

The dollar index languished around its three-year low on Monday, with
investors expecting further weakness as the upcoming Federal Reserves'
policy-setting meeting is likely to announce the continuation of low
interest rates.

The escalated violence in Syria and Yemen over the weekend also helped
lift gold, seen as a safe haven during time of turmoil.