Spot silver jumped more than 2 percent on Tuesday

Spot silver jumped more than 2 percent and gold was headed for a third session of gains on Tuesday, as investors returned to the market in the new year with renewed appetite for riskier assets such as commodities.

Although the global economy still faces uncertainties, better-than-expected manufacturing data from China supported sentiment and encouraged investors to return to the market after the year-end credit tightness forced many to the sidelines.

Cash silver rose as much as 2.1 percent to $28.39 an ounce, before easing slightly to $28.20 by 10:01 p.m. EST.

The metal, with extensive industrial applications, lost nearly 10 percent in 2011 as worries about the global economy weakened prospects of industrial metals.

“Silver is one of the more appealing trades of the new year, after a lot of positions have been emptied out,” said a Singapore-based trader.

“Now the turn of the year has happened and we will probably see silver back on radar screens for some accounts, especially those with healthy tolerance for risk.”

Managed money cut net length on U.S. silver futures and options to 6,200 lots in the week ended December 27, its lowest in more than three years, according to data from the U.S. Commodity Futures Trading Commission. – Reuters

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Posted by Silver Guru on Jan 3 2012. Filed under Silver prices. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry