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PRECIOUS-Silver bounces back even as retail-frenzy takes a break

 (Adds comments, details, updates prices)
    * CME's move allowing markets to breathe easy-analyst
    * Billion ounces of silver traded in London on Monday - LBMA
    * FACTBOX-How silver is traded             

    By Sumita Layek
    Feb 3 (Reuters) - Silver prices rebounded on Wednesday after
an over 8% plunge in the previous session prompted investors to
buy in, although the social media-driven rally that started last
week appears to have run out of steam.
    Spot silver        rose 1.4% to $26.99 an ounce by 0333 GMT.
    Prices hit $30.03 on Monday, their highest since February
2013, after small investors responding to social media calls
flooded the market in a GameStop-style squeeze.                 
    "The (retail) frenzy is dead, it's rolled over," said
Stephen Innes, chief global market strategist at financial
services firm Axi.
    "It's fundamental driven today as there is a consistent
demand for silver in the underlying primarily because of the
green energy demand which is going to be using a lot of silver."
    The white metal plunged over 8% in the previous session
after CME Group         raised maintenance margins on silver
futures by 17.9% on Monday, in a familiar move aimed at reducing
market volatility.             
    "(CME's intervention) is allowing the markets to breathe a
lot more easier because that fear of retail flash mobs has
diminished quite greatly," Innes added.
    The buzz that started last Thursday saw silver dealers
scramble to find supplies for retail buyers, and the amount of
silver traded in the London market surged to 1.006 billion
ounces on Monday.                          
    While posts on the WallStreetBets Reddit forum at the centre
of this retail rush have urged traders to steer clear of silver,
analysts expect some volatility to continue.
    "I don't think we should write them off just yet, and
underestimate the collective power of many retail investors,"
said Howie Lee, an economist at OCBC Bank.
    Spot gold        rose 0.2% to $1,840.86 per ounce. U.S. gold
futures        added 0.5% to $1,842.
    "The gold-silver ratio is currently below normal and we can
see this to continue converging back," Lee added.
    Platinum        was steady at $1,094.89 and palladium       
gained 0.1% to $2,242.84.

 (Reporting by Sumita Layek in Bengaluru; Editing by Krishna
Chandra Eluri)
  
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