PRECIOUS-Silver lights up as traders seek cover from attempted squeeze

 (New throughout, updates prices, market activity and comments)
    * Dollar retreats from a more than one-week high
    * Interactive graphic tracking global spread of coronavirus:

    By Shreyansi Singh
    Jan 28 (Reuters) - Silver prices rose around 7% on Thursday
as the dollar weakened, making the metal cheaper for buyers
outside the United States.
    Some traders were also moving to cover short positions as
rumours rippled through the market about a GameStop-style
squeeze driven by retail investors.
    Calls to drive silver prices higher by buying shares in
silver miners and exchange traded funds (ETF) were circulating
on social media such as Reddit and Twitter. 
    Trading of Blackrock's         iShares Silver Trust< SLV>
surged, while shares in Canadian miner First Majestic Silver
               leaped more than 30%.             
    Spot prices        shot as high as $26.95 an ounce after
U.S. markets opened, up almost 7%, before slipping back to
$25.93 an ounce by 01:43 p.m. EST (1843 GMT).
    "After watching GameStop and other shorts getting blasted,
rumours that silver could be targeted has traders preemptively
covering shorts just in case,” said Tai Wong, a trader at
investment bank BMO in New York.  
    Other analysts said the social media action was not
impacting prices. 
    The silver market is much larger and more liquid than shares
of companies such as GameStop        , whose shares have
ricocheted madly this week. Because of this, efforts of retail
investors will have little effect, predicted Ross Norman, an
independent analyst.
    The dollar also fell as U.S. markets opened, giving a boost
to dollar-priced precious metals.               
    Data showed the U.S. economy contracted in 2020 at its
sharpest pace since World War Two, encouraging investment in
assets such as silver and gold, traditionally seen as safe
stores of wealth. 
    Spot gold        spiked as much as 1.1% higher as U.S.
trading began, before slipping to $1,840.81 an ounce, near their
lowest since Jan. 18. 
    U.S. gold futures        settled 0.4% lower to $1,837.90.
    Meanwhile, platinum        edged up 0.5% to $1,070.31.  
Palladium        rose 1% to $2,327.98. 

 (Reporting by Shreyansi Singh and Arpan Varghese in Bengaluru,
Peter Hobson in London
Editing by Marguerita Choy and David Gregorio)