* Silver reaches highest since May 2015 at $17.60/oz
* Coming up: Outcome of ECB policy meeting
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC
* GRAPHIC-Gold/platinum ratio: http://link.reuters.com/xez92s
(Updates prices)
By Jan Harvey
LONDON, April 21 (Reuters) - Silver hit an 11-month high on
Thursday as the dollar retreated, boosted by perceptions the
metal had become undervalued versus gold and by technical
momentum, while gold rallied more than 1 percent ahead of a
European Central Bank meeting.
Silver is up more than 7 percent this week, and on track for
its biggest weekly rise since January 2015 after a break of key
chart resistance last week sparked a wave of buying.
It reached its most expensive versus gold in six months on
Thursday, with an ounce of gold buying 72.3 ounces of silver,
against a more than seven-year high of 83 ounces in late
February.
Spot silver XAG= was up 2.6 percent at 1130 GMT at $17.37
an ounce, having touched $17.60, its highest since May 2015.
Gold XAU= was up 1.2 percent at $1,258.66 an ounce, while
U.S. gold futures GCv1 for April delivery were up $6.30 an
ounce at $1,260.70.
"Silver has most certainly been developing its own strong
momentum, the way it has rallied and outperformed gold," Saxo
Bank's head of commodities research Ole Hansen said. "Gold has
been 'saved' this time round by silver, as demand has slowed."
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Shares GLD , has seen outflows of 14
tonnes so far this week, while silver ETF holdings have surged.
"(Silver) could potentially be running out of steam ahead of
the 17.80 high from last year, and that could lead trigger some
profit taking," Hansen said. "The strength of the market will be
determined by whether $16.80 will be strong enough to cap the
correction once it starts."
Bullion traders are now awaiting the outcome of an ECB
meeting later in the session for any impact on the dollar, in
which the precious metals are priced. The ECB is not expected to
make any policy changes at its rate-setting meeting.
"ECB President (Mario) Draghi will probably present details
of the recently decided measures," Commerzbank (DE:CBKG) said in a note.
"In addition, he will keep all options open as regards the
future monetary policy of the ECB. If he shows himself more open
to possible further rate cuts, this is likely to support gold."
The euro EUR= was up 0.2 percent against the dollar ahead
of the meeting. The focus will also be on U.S. economic data
that could affect the Federal Reserve's monetary policy.
Among other precious metals, spot platinum XPT= was up 1.5
percent at $1,030.85 an ounce and spot palladium XPD= was up
0.5 percent at $596.44 per ounce.
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GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC
GRAPHIC-Gold/silver ratio: http://link.reuters.com/kuq35s
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