LONDON -- Silver hit a new six-month high on Tuesday as investors poured in money on expectations that thin liquidity and growing interest in an exchange-traded fund might push prices to further peaks.
But platinum touched a one-month low and gold slipped, as investors took profits after gold's failure to breach $650 an ounce despite repeated attempts.
"Investors have been buying silver because they are focusing on the increase in silver stocks held by the New York ETF, which have reached 110 million ounces," said David Holmes, director of precious metals sales at Dresdner Kleinwort Investment Bank.
"And there is a concern that there will be a squeeze and that would drive the price back to its May highs. However, on the other side of the coin, the market is already long."
Silver rose as high as $14.09 an ounce and was quoted at $14.03/14.10 by 1118 GMT, against $14.08/14.15 in the U.S. market late on Monday. It surged to a 25-year high of $15.17 in early May.
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The metal has risen about 34 percent in two months.
Precious metals consultant GFMS said last month that strong investor buying of silver, fuelled by a popular exchange-traded fund (ETF), is likely to take the price to $15 an ounce in the next few months despite lower fabrication demand.
The ETF, called iShares Silver Trust , has so far accumulated about 3,400 tonnes of silver, or about one-fifth of annual mine production, since its launch in April.
In other precious metals, spot gold hit an intraday high of $646.60 an ounce, higher than $645.40/646.40 late in New York on Monday, but later fell to $643.40/644.40.
Dealers said $650 was proving a tough resistance level for the metal and jewellery makers seemed to be well stocked ahead of Christmas, but they remained optimistic.
"Mid- to longer-term sentiment remains very strong as dollar diversification look set to continue," James Moore, precious metals analyst at TheBullionDesk.com, said in a daily note.
"However short-term gold has met strong resistance at the $650 level, and may look to spend a little time around $638-$650 before moving through the challenge $675/$688."
The dollar was still holding within sight of Monday's 20-month low against the euro.
A weaker dollar generally pushes up gold prices.
Platinum rose as high as $1,164 an ounce before falling $1,128/1,134, against $1,154/1,159 in New York. Palladium fell $1 to $325/330 an ounce.
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