PRECIOUS-Silver extends golden run as retail frenzy jitters persist

* Gold down 2% for the month

* Silver up 6.3% set for biggest weekly gain since mid-Dec

* Palladium on track for biggest monthly decline since April

* Interactive graphic tracking global spread of coronavirus: tmsnrt.rs/3mvcUoa (New throughout, updates prices, market activity and comments)

Jan 29 (Reuters) – Silver continued a blistering rally on Friday, taking its gains to around 10% since messages began to circulate on Reddit on Thursday morning urging retail investors pile into the market and drive up prices.

Silver’s surge rubbed off on gold, which jumped as much as 2%.

The two were also helped by a softer dollar, which makes them cheaper for buyers with other currencies, and falling stock markets.

Silver soared as much as 7% on Thursday after calls appeared on Reddit to buy silver mining stocks and iShares Silver Trust , an exchange traded fund (ETF) backed by physical silver bars, in a GameStop-style squeeze.

Some silver traders covered short positions to avoid being caught by rising prices, while some mining stocks surged and trading of iShares Silver rose almost four-fold.

Buying of the ETF can bolster silver prices by increasing the number of shares in the fund and making its operator buy more metal to back them.

Analysts said they expected the rally to be short lived, with the size of the market making it far less easy to influence than companies like GameStop.

“We are confident that the influence of retail investors on silver will not last all that long, and that ultimately industrial and institutional demand will be the key factor in the longer term,” Commerzbank analyst Eugen Weinberg said in a note.

By 11:16 a.m. EST (1616 GMT) on Friday, silver was up 2.4% at $26.99 an ounce, en route to its best weekly gain since mid-December, at over 6%.

Standard Chartered analyst Suki Cooper said she expected solid demand for silver from investors and industry to lift prices towards $30 during the first half of 2021.

Spot gold, meanwhile, rose 0.9% to $1,856.59 an ounce, with U.S. gold futures up 1.1% to $1,860.60.

But gold was on track for its worst January since 2011, something many analysts attribute to a strengthening dollar and increasing investor focus on assets that will benefit from economic recovery..

Platinum rose 0.4% to $1,074.56, while palladium fell 4.8% to $2,223.59.

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