* Palladium hits nine-year peak, silver at 30-year highs
* Gold up for a third day above $1,410/oz
* Coming up: U.S. pending home sales; 1500 GMT
(Updates with comment, refreshes prices)
By Amanda Cooper
LONDON, Dec 30 (Reuters) - A weaker U.S. dollar and a
year-end flurry of investment in commodities pushed silver to
new 30-year highs on Thursday, while palladium neared its
highest in almost ten years and gold held above $1,400 an ounce.
The dollar weakened broadly after the largest one-day
decline in five-year Treasury yields <US5YT=RR> in three months
removed some of the currency's appeal to non-U.S. investors,
giving a number of commodities, such as copper, which hit
all-time highs above $9,500 a tonne <CMCU3>. [] []
Spot silver <XAG=> was last at $30.60 an ounce, up 0.4
percent on the day by 1500 GMT, having risen by as much as 1
percent earlier to a session peak at $30.88, pushing the
gold/silver ratio, which denotes each metal's relative
performance, to its lowest in four years.
"These last few days it seems as if silver has been the main
driver and gold is just trotting along with a lack of sellers,"
said Saxo Bank senior manager Ole Hansen.
"Once something has a firm trend established, it's easy to
push ... there has to be a story behind it to justify it
otherwise you would have seen profit-taking setting in a while
back," he added.
Silver is at its highest since early 1980, on course for an
83 percent gain this year, its strongest performance in at least
27 years.
SILVER LINING
Investors have flocked into silver this year as a cheaper
safe-haven alternative to gold, which hit a record high of
$1,430.95 an ounce in early December.
Holdings of silver in the iShares Silver Trust <SLV>, the
world's largest exchange-traded fund backed by physical silver,
have risen to 10,903.34 tonnes, from 9,492.97 tonnes at the end
of last year, while open interest in U.S. silver futures has
risen by 8,801 contracts, or 44.0 million ounces.
Gold eased by 0.3 percent to $1,406.75 an ounce after a
gauge of business activity in the auto-intensive U.S. Midwest
region far outstripped expectations in December. []
The gold price is also is set for its tenth consecutive
annual gain, having risen by nearly 30 percent in 2010, its
strongest yearly performance since a 31 percent rise in 2007
when the global financial crisis began to manifest itself.
Gold's inverse correlation to the dollar index <.DXY>
reached its strongest in eight weeks on a 30-day rolling basis.
"Overall, I don't think today or tomorrow we are going to
have any kind of correction as such," said Afshin Nabavi, MKS
Finance head of trading.
"I'm quite friendly towards it and probably feel that
tomorrow night we are going to end the year with some fireworks
as well," referring to the potential for gains in other metals.
The euro zone debt crisis, which unfolded in April this year
and culminated in multi-billion euro international bailouts for
both Greece and Ireland, has been one of the prime drivers of
investment demand for gold.
Holdings of gold in the SPDR Gold Trust <GLD>, the world's
largest exchange-traded fund backed by physical bullion, have
risen 15 percent this year to 1,284.062 tonnes, and a near 20
percent rise in open interest in U.S. gold futures also reflects
some of this investor desire to hold gold. [] <0#CFTC>
Palladium notched up a fourth straight day of increases and
was set for a second year of gains, having almost doubled to
near $800 an ounce over the course of 2010 and is this year's
top performing commodity.
Analysts widely expect a surge in demand for palladium next
year, mainly from China, which boasts the world's largest auto
market that is dominated by gasoline-powered vehicles, which use
palladium in their catalytic converters.
The ratio of platinum to palladium has fallen to its lowest
in about eight years this year, mirroring palladium's
outperformance over platinum, which relies heavily on the
flagging European car market as a source of industrial demand.
Spot palladium <XPD=> rose to a nine-year high of $795.00
before trading back at $794.47, up 0.5 percent on the day, while
platinum <XPT=> rose to a session high of $1,767.5, its highest
since Nov 11, before holding largely steady at $1,753.99.
(Additional reporting by Rujun Shen in Singapore, editing by
Keiron Henderson)
