* High open interest on strike levels $45 and $50 on COMEX
silver
* Investors eye Fed meeting Tue-Wed for policy cues
* Coming up: U.S. consumer confidence, April; 1400 GMT
(Updates prices; adds detail)
By Rujun Shen
SINGAPORE, April 26 (Reuters) - Silver prices trimmed a fall
on Tuesday that had ended the precious metal's surge to a record
high, as option traders sold back metal to cover risks ahead of
options expiry later in the day.
Spot silver prices had exploded in Monday's session, soaring
to within 17 cents of the 1980 record high as options sellers
bought silver when key strike levels at $45 and $50 came under
threat of exercise.
"People are watching out for options expiry," said Yingxi
Yu, an analyst at Barclays Capital.
"There are decent-sized open interests at the strike levels
of $40, $45 and $50. When there are large positions, it tends to
suggest that prices may sway to those levels on options expiry."
U.S. silver futures <SIcv1> tumbled as much as 5.4 percent
to $44.61 an ounce, and gained some lost ground to $45.52 by
0615 GMT. The contract rallied to $49.82 in the previous
session, a hair off their record high of $50.35.
Spot silver lost 3 percent to $45.50, ending a
9-session winning streak and headed for its biggest daily loss
in more than a month.
"The market will remain very nervous, and we'll see how it
goes after option expiry," said a trader in Singapore, who
expected prices to move around the current level.
Spot gold fell 0.6 percent to $1,499.60 an ounce,
after a seven-day record-setting rally that pushed prices to
$1,518.10 on Monday.
U.S. gold <GCcv1> also lost 0.6 percent to $1,500.10.
There is high open interest at key strike levels of $1,500
and $1,520 on COMEX gold, which will keep prices stable until at
least later in the day, traders also said.
Investors are eyeing the U.S. Federal Reserve's policy
setting meeting, which kicks off later on Tuesday, for clues to
its policy stance. []
Ben Bernanke is set to give on Wednesday the first regularly
scheduled news briefing by a Fed chief in the bank's 97-year
history.
"The market will be watching out for any signs of what the
Fed is going to do at the end of the second round of
quantitative easing," said Yu of Barclays.
"If Bernanke remains dovish, as he has been, it will provide
indication that monetary policy will not be tightened
significantly in the second half, which is pretty favourable for
precious metals."
The dollar edged up on Tuesday, but is still seen
wobbly, even after the euro slipped on remarks from the European
Central Bank Governor Jean-Claude Trichet that a strong dollar
is in the interest of the United States.
Platinum group metals fell in tandem with gold and silver.
Spot platinum fell off a seven-week high of $1,836.74,
down 1.1 percent to $1,799.24.
Spot palladium shed 0.7 percent to $752.50.
Precious metals prices 0615 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1499.60 -8.85 -0.59 5.65
Spot Silver 45.50 -1.40 -2.99 47.44
Spot Platinum 1799.24 -20.06 -1.10 1.80
Spot Palladium 752.50 -5.30 -0.70 -5.88
COMEX GOLD JUN1 1500.10 -9.00 -0.60 5.54 21571
COMEX SILVER MAY1 45.52 -1.63 -3.46 47.12 39682
Euro/Dollar 1.4521
Dollar/Yen 81.70
COMEX gold and silver contracts show the most active months
(Additional reporting by Nick Trevethan in SINGAPORE; Editing
by Clarence Fernandez)
