Silver and gold near lifetime highs

Reuters) - Silver and gold were within sight of historic highs on Friday and could resume an uptrend as the U.S. dollar held near three-year lows against a basket of currencies on hopes U.S. monetary policy would stay ultra-loose, keeping inflationary price pressures high.

A fresh batch of U.S. economic data in the form of rising claims for jobless benefits failed to rescue the dollar, which had dropped to its weakest level since July 2008 against other currencies before recovering slightly.

Silver barely moved, standing at 48.35 an ounce by 0625 GMT, after having rallied to a record at $49.51 an ounce on Thursday. Gold eased 75 cents to $1,534.20 an ounce after hitting a lifetime high around $1,538 an ounce in the previous session.

“If the dollar continues to weaken, then it’s only likely to boost gold as well as silver as the inverse relationship between the two assets persists. I would say that for gold I am still looking for it to hit $1,600 this year,” said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.

“In the long term, I think, if we see silver prices at such a high level, then it could hurt the industrial demand.”

But dealers said strong investment demand for silver would keep the metal at record levels, while a lack of scrap sales in the physical market suggested that investors expected more gains. Year to date, silver was up almost 60 percent, sharply above gold’s 8 percent gain.

A bullish target at $1,549 per ounce is still intact for spot gold, based on its wave pattern and a Fibonacci projection analysis, according to Wan Tao, who is a Reuters market analyst for commodities and energy technicals. “There’s some selling but I would say it’s very light,” said a dealer in Singapore, who trades gold and silver. “It had been a very busy week, and I am glad today is Friday.

It’s all quiet, finally.”

The CME Group Inc, parent of the Chicago Board of Trade, said on Thursday it would raise maintenance margins for COMEX 5000 Silver futures by 13.2 percent, making it more expensive for silver speculators to trade in.

Soaring prices hurt the bottom line of certain manufacturers, including photography company Eastman Kodak, which said on Thursday a hike in raw material costs, particularly silver, led to a decrease in its film business revenue.

Brent falls to $124 on slower US growth fears

Brent fell 32 cents to $124.70 a barrel on Friday, after settling at a 31-month high in the previous session, on concerns that slowing growth in top consumer United States may pare demand, but a weaker dollar helped stem a slide in prices.

Still, US crude is heading for a rise of 5.7 percent in April, marking its eighth consecutive month of gains, and the longest run of monthly increases since 1983, Reuters data shows.

A weak dollar, wallowing at three-year lows, helped bolster silver and gold within sight of historic highs on Friday as investors sought alternative assets.

On the other hand, US economic growth braked sharply in the first quarter as higher food and gasoline prices dampened consumer spending and sent inflation rising at its fastest pace in 2-1/2 years.

‘The two pieces of news have counterbalanced each other, helping keep oil steady,’ said Victor Shum, an analyst at Purvin & Gertz. ‘Oil had risen somewhat, and some pullback from that point was not unexpected.’

Nymex crude for June fell 44 cents to $112.42 a barrel by 0630 GMT, after settling at $112.86. Brent fell as much as $124.50 a barrel, after ending at $125.02.

US crude futures rose on Thursday to hit a 31-month high settlement after a volatile trading session. US gasoline futures surged for a sixth straight session, pushing prices to their highest since July 2008, as the world’s top consumer gears up for driving season.