Firm oil prices push silver up by Rs 435

Firmer crude oil prices sparked interest among buyers for silver, pushing the metal up to $13.84 per ounce in the London Bullion Market on Friday.

Gold too hit its highest level in more than three months to rise above $648 an ounce before losing some of its gains, as the European Central Bank sold 23 tonne of the yellow metal.

In Jhaveri Bazaar, the silver price surged to Rs 20,510 a kg on Friday from Rs 20,075 on Thursday. In the domestic market, silver prices had slipped below the Rs 20,000 mark on May 15 from Rs 21,035 a kg.

Crude oil prices in London touched a high of $66 a barrel in the wake of a weak dollar and the Opec's threat to cut output. Silver touched the six-month high of $13.96 an ounce on bargain hunting in New York and slipped later due to profit booking by stockists before the weekend.

The strength of the currency would determine the direction for gold and silver and these precious metals could see long liquidation on any sustained reversal of the dollar and oil prices, a local trader said.

Experts believe spot silver may feel resistance at $14.07 per ounce and may be due for a correction. However, given the current momentum of the metal, there is room to challenge the $14.50-14.60 per ounce range.

Spot silver traded on Thursday to a fresh six-month high of $14.03 per ounce. Comex March silver gained 35.5 cents on Thursday to $14.115 an ounce. CBOT March silver was up 36.4 cents to $14.112 an ounce.

On the currency front, the euro firmed on Thursday as high as $1.3274 against the dollar, its strongest level since March 2005. The British pound, too, hit a 14-year high against the dollar at $1.9698.