* Silver above $30 first time since 1980, gold hits record
* COMEX futures volume slows, could signal weakness
* Bernanke raises prospect of further U.S. easing
* Coming up: US weekly jobless claims on Thursday
(Recasts, updates prices to market close, adds second
byline/dateline, previously NEW YORK)
By Frank Tang
NEW YORK, Dec 6 (Reuters) - Silver rose above $30 an ounce
for the first time since 1980 on Monday as gold set a record
high, but thin volume for both metals could indicate near-term
weakness as some investors stayed on the sidelines ahead of the
year end.
Gold and silver rose in a safe-haven play on the back of
speculation U.S. authorities will extend monetary easing and
lingering worries over euro zone debt, analysts said.
While gold has grabbed investors' attention this year with
its rally to record highs above $1,420 an ounce, silver has
quietly outpaced those gains. A $100 investment in silver on
Jan. 1 would now be worth about $180, versus a gold
investment's $130.
(Graphic: http://link.reuters.com/fyz68q )
"The (silver) market is extremely well bid. The funds are
obviously adding the support underneath the market," said Frank
McGhee, head precious metals trader of Integrated Brokerage
Services LLC in Chicago.
"You've got dwindling above-ground stocks, you've got
tremendous interest in the market, you've got the Fed now
talking about QE3," McGhee said. He added silver has been
playing catch-up to gold's rally.
Spot silver <XAG=> rose 2.5 percent to $30.08 an ounce,
having earlier hit a 30-year high at $30.25.
Spot gold <XAU=> rose 0.4 percent to $1,419.65 an ounce. It
climbed to an all-time high at $1,427.01 an ounce late in the
U.S. session. U.S. gold futures for December delivery <GCZ0>
settled up $9.90 at $1,416.10 an ounce.
COMEX silver futures volume at 81,000 lots, almost 70
percent below their 250-day average, while gold volume was at
140,000 contracts, more than 40 percent below its 30-day
average, as some trading desks and funds have already closed
their books ahead of the year end.
"It seems like there are less players in the market, and
that only seem to accentuate the trend because there is less
volume...That's how you see a move in silver much grander than
gold right now," said Mihir Dange, COMEX gold floor trader.
However, one analyst said that dwindling turnover for
silver futures could signal price decline in the near term.
"Volume is key, and the low volume is suggesting this is a
temporary, short-term top for silver," said David Morgan,
founder of Silver-Investor.com.
The rally in silver -- up nearly 80 percent this year
versus gold's 30 percent gain -- has narrowed the
gold-to-silver ratio to less than 48, its lowest level since
the first quarter of 2007 and a point at which more analysts
were beginning to call silver overvalued.
Net long positions in U.S. silver futures held by
speculators rose by 12 percent in the week ended Nov. 30, as
momentum traders jumped back into a market that has since then
rallied to a 30-year high, according to the Commodity Futures
Trading Commission data. []
At over $30 an ounce, silver is at its highest level since
1980 when a physical squeeze briefly sent it above $50 an ounce
in the Hunt Brothers' infamous attempt to corner the market.
The Hunts were later convicted of conspiring to manipulate the
market.
BERNANKE: COULD BUY MORE THAN $600 BLN
For gold, its strength can be seen against currencies
across the board, as gold hit record highs in U.S. dollar,
sterling and euro terms, and Japanese yen-denominated bullion
hit its highest since early 1983.
Gold benefited as a hedge against inflation after Federal
Reserve Chairman Ben Bernanke said on Sunday the bank could buy
more than the $600 billion in U.S. government bonds it has
committed to purchase. []
The euro snapped a three-day advance versus the dollar on
Monday and selling pressure is likely to continue as doubts
grew that European officials would find a common approach to
ease the region's debt crisis. []
Platinum <XPT=> slipped 0.3 percent to $1,720.50 an ounce,
while palladium <XPD=> fell 0.4 percent to $755.47.
(Additional reporting by Jan Harvey in London;editing by
Sofina Mirza-Reid)
