LONDON, March 24: Silver spiked to a new high in more than 22 years on Friday, with investors pouring money into the metal on expectations the first silver-backed security is closer to approval by US authorities.

Gold lacked impetus to move up and traded in a tight band of $2 an ounce, but platinum and palladium extended gains.

Silver has risen more than 21 per cent this year mainly on hopes of the launch of the security, known as exchange-traded funds (ETFs), despite opposition from a group representing users in the United States.

The initial market reaction, when the ETF news came out, was a little bit hesitant but it has got back into its stride now, said Stephen Briggs, economist at SG Corporate and Investment Bank.

Spot silver rose as much as $10.70 an ounce before easing to $10.66/10.69 an ounce by 1100 GMT, compared with $10.63/10.66 in New York late on Thursday.

But the Silver Users Association said on its Internet site www.silverusersassociation.org it opposed the launch of a silver fund as the product would make the metal too expensive or illiquid, and could threaten jobs.

The silver market is expected to remain in deficit in the next couple of years as industrial and consumer demand is seen outpacing the mine supply, estimated at around 20,000 tons in the current year.

Silver, used in making jewellery and industrial goods, also took direction from copper that hit a record $5,250 on Thursday after news of a landslide near Freeport-McMoRan Copper & Gold Inc.’s giant Grasberg mine in Indonesia.

Spot gold was at $549.50/550.25 an ounce, against $549.90/550.80 in New York and stayed below a 25-year high above $574 an ounce hit in early February.

Gold’s failure to breach a key resistance of $560 has disappointed investors and encouraged some to sell gold and buy silver, dealers said.

Palladium increased to $324 an ounce, the highest in nearly two years, before falling to $321/324. It closed in the US market at $318/323.—Reuters