PRECIOUS-Silver claws back momentum as market looks past retail-led gyrations

(Recasts, adds comments, updates prices)
* Some volatility to persist in silver, analysts say
* Record jump in iShares Silver Trust holdings on Tuesday

By Shreyansi Singh
Feb 3 (Reuters) - Silver regained momentum on Wednesday as
the market's focus returned to prospects for higher demand for
the metal as the global economy picks up, after a sharp slide in
the previous session halted a social media-inspired buying
spree.
Spot silver XAG= was up 1.3% at $26.96 an ounce at 1409
GMT, having earlier risen as much as 2.1%.
A weaker dollar and expectations of strong economic
activity, amid easy monetary policy globally, are among the
factors that make "a strong argument to see higher silver
prices," and the recent retail-driven buying frenzy "made it
much faster than expected," UBS analyst Giovanni Staunovo said.
While silver tends to move in tandem of safe-haven gold
under normal circumstances, silver also closely follows economic
cues because of its industrial applications.
"From a fundamental perspective, improving economic activity
is an environment where silver tends to do fine," Staunovo
added.
Prices had surged to $30.03 on Monday, their highest since
February 2013, after investors attempted to replicate a
retail-driven rally in shares of video game retailer GameStop.
Reflecting sentiment, holdings in iShares Silver Trust, the
largest silver-backed ETF HLDISHAST=XAG , jumped by a record
57.8 million ounces, data showed on Tuesday. GOL/ETF
The buying spree left silver dealers scrambling to find
supplies for retail buyers. "Silver prices are now finding an equilibrium that better
reflects supply-demand fundamentals, with the WallStreetBets
mania having simmered down," said FXTM market analyst Han Tan,
referring to a forum on the Reddit social media platform that
fueled the retail buying frenzy.
But analysts expect some volatility to continue even though
posts on WallStreetBets urged traders to steer clear of silver.
"If silver does not stir higher again, market attention will
likely shift back to gold," HSBC analyst James Steel said.
Spot gold XAU= was steady at $1,837.16 per ounce. U.S.
gold futures GCv1 added 0.3% to $1,838.90.
Platinum XPT= rose 0.1% to $1,095.50 and palladium XPD=
rose 0.6% to $2,256.06.

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Silver prices and iShares Silver ETF https://tmsnrt.rs/3avrJml
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