* U.S. silver reverses after topping $49/oz, then steadies
* Technical failure triggers heavy selling
* Spot gold up and down in tandem with silver, hits record
(Recasts, adds comments, updates market activity)
By Frank Tang
NEW YORK, April 25 (Reuters) - Silver surged as much as 8
percent on Monday before pulling back when a failure to pierce
the all time high from 1980 triggered a wave of technical
selling amid record volume in the U.S. futures market.
After briefly dipping into negative territory midmorning,
silver had found its footing again by early afternoon. Gold
prices also recoiled from early gains of nearly 1 percent that
established a new record high.
Though trading was unusually thin because of Easter market
holidays, the whipsaw in silver was a stark reminder of the
volatile nature of this year's best-performing major commodity,
which has gained more than 150 percent since the U.S. Federal
Reserve signaled new easing measures last August,
reinvigorating a years-long precious metals rally.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on gold, silver prices http://r.reuters.com/xup29r
Technical view on silver []
TIMELINE-A brief history of silver []
ANALYSTS VIEW-Silver's bull run seen to continue
[]
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While often overshadowed by gold, the smaller silver market
has handily outpaced the yellow metal's 25 percent gains over
the same period. Prices look set to challenge the record from
three decades ago when the Hunt Brothers of Texas sought to
corner the market.
"This morning's action so far does look like a potential
exhaustion," said James Dailey, portfolio manager of the TEAM
Asset Strategy Fund. <TEAMX.O>
Silver's technical charts are showing a classic island
reversal pattern, with strong volume recorded at its sharply
higher open and the subsequent reversal, Dailey said.
Spot silver <XAG=> was up 1.9 percent at $47.54 an ounce by
11:55 a.m. EDT (1555 GMT), sharply below a session high of
$49.31.
U.S. silver futures <SIK1> jumped as much as over 8 percent
to a intraday high of of $49.82 an ounce, just about 50 cents
off its all-time peak of $50.35 hit on Jan. 18, 1980. They last
traded at $47.570 an ounce.
U.S. silver volume surged to a record high on Monday,
already topping 250,000 lots, more than doubled gold's
turnover, preliminary Reuters data showed.
COMEX option floor trader Dominic Cognata said that
volatility in silver options "went through the moon" ahead of
Tuesday's May option expiration and Wednesday's conclusion of
the Fed's two-day policy-setting meeting.
Trading volume was unusually high even without the
participation of Britain, Canada and Australia due to the
Easter Monday holiday.
Silver's sharp reversal also coincided with weakness in
gold and crude oil prices.
Spot gold <XAU=> hit a record high of $1,518.10 an ounce.
It fell in tandem with silver to $1,510.60 an ounce.
Prices at 11:55 a.m. EDT (1555 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCM1> 1511.60 7.80 0.5% 6.3%
US silver <SIK1> 47.570 1.531 3.3% 53.8%
US platinum <PLN1> 1822.50 1.80 0.1% 2.5%
US palladium <PAM1> 756.50 -12.55 -1.6% -5.8%
Gold <XAU=> 1510.60 7.05 0.5% 6.4%
Silver <XAG=> 47.54 0.87 1.9% 54.1%
Platinum <XPT=> 1816.49 5.69 0.3% 2.8%
Palladium <XPD=> 754.00 -11.48 -1.5% -5.7%
Gold Fix <XAUFIX=> 1504.00 -3.00 -0.2% 6.6%
Silver Fix <XAGFIX=> 46.26 147.00 3.3% 51.0%
Platinum Fix <XPTFIX=> 1812.00 2.00 0.1% 4.7%
Palladium Fix <XPDFIX=> 765.00 6.00 0.8% -3.3%
(Additional reporting by Rujun Shen in Singapore; Editing by
Marguerita Choy and Alden Bentley)
