* Physical silver demand more than doubled since Thursday -
dealer
* Gold-silver ratio falls to multi-year low
(Adds comment, updates prices, adds graphic)
By Sumita Layek
Feb 1 (Reuters) - Silver rallied for a third straight
session on Monday, soaring as much as 11.2% to a near eight-year
peak as retail investors in Asia followed up frenzied buying by
U.S. counterparts last week following a social media-led call to
push the market higher.
Spot silver XAG= jumped 8.7% to $29.36 an ounce by 0831
GMT, having earlier hit its highest since February 2013 at
$30.03.
Both a safe-haven asset and an industrial metal, silver has
risen nearly 19% since Thursday when posts began circulating on
Reddit urging individual investors to buy silver mining stocks
and exchange-traded funds (ETF) backed by physical silver bars,
in a GameStop-style squeeze.
"This is Asia's response" to all the retail mania, Brian
Lan, managing director at GoldSilver Central said.
Demand for physical silver has more than doubled since
Thursday, as investors who were on the sidelines bought the
metal on worries that prices will shoot up, Lan said.
Data from iShares Silver Trust ETF SLV , the largest
silver-backed ETF, showed silver holdings in the trust jumped by
a record 37 million shares from Thursday to Friday alone, each
representing an ounce of silver.
ETF investments boost silver prices as the operator has to
buy more metal to back them. Total silver holdings by all major
ETFs HLDTOTALL=XAG surged to a record 912 million ounces last
week, compared to just over 600 million a year ago.
Analysts expect the market to stay volatile in the near term,
and some see prices testing $35 to $38 an ounce.
However, "once the storm calms, prices will come back to
normal levels around $26-$27" and remain supported on strong
fundamentals, said Jigar Trivedi, commodities analyst at
Mumbai-based broker Anand Rathi Shares.
Silver was among the top performing assets last year with a
near 50% gain and is expected to extend that run this year
backed by favourable policies in the U.S. Spot gold XAU= jumped 0.8% to $1,860.45. U.S. gold futures
GCv1 gained 1% to $1,868.60.
Experts caution that gold's relatively subdued performance
suggests that silver's rally may not last long.
"Given the gold-silver ratio is at a multi-year low, we see
limited room for further outperformance of silver," said Soni
Kumari, commodity strategist with ANZ.
Platinum XPT= rose 4.2% at $1,118.04 and palladium XPD=
gained 1.4% to $2,257.20.
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Holdings in the world's largest silver ETF, iShares Silver
Trust, spike to record peak https://tmsnrt.rs/3cpqJmB
Silver has outperformed gold in price terms and in ETF holdgings
in recent months https://tmsnrt.rs/39CYA9y
Gold-silver ratio falls to multi-year low https://tmsnrt.rs/39BU6jS
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