PRECIOUS-Silver scales 8-year peak as investors keep up feverish buying

* Excessive price rise can hamper physical demand - analyst
* Chinese investors jump on silver * Gold-silver ratio falls to multi-year low

(Updates prices)
By Asha Sistla
Feb 1 (Reuters) - Silver extended its blistering rally for a
third session on Monday, soaring as much as 11.2% to a near
eight-year peak as retail investors piled into the metal in a
frenzy kicked off by U.S. social media users last week.
Spot silver XAG= was up 9.4% at $29.53 an ounce by 1418
GMT, having earlier hit its highest since February 2013 at
$30.03.
Silver has gained nearly 19% since Thursday when posts began
circulating on Reddit urging small investors to buy silver
mining stocks and exchange-traded funds (ETF) backed by physical
silver bars in a bid to replicate a squeeze on GameStop.
"It's hard to say how far this can go. It's all about
momentum; if the futures market also gets behind this move, they
could add fuel to the fire, so the New York open would be very
interesting," said Ross Norman, an independent analyst.
Commerzbank analyst Eugen Weinberg said in a note that in
the medium term, any excessive price rise is harmful for silver
as it can damage physical demand.
Silver ETFs and mutual funds saw their biggest inflows in
five months in January, Refinitiv Lipper data showed.
Holdings in iShares Silver Trust ETF SLV , the largest
silver-backed ETF, HLDISHAST=XAG jumped by a record 37 million
shares from Thursday to Friday alone, each representing an ounce
of silver.
Spot gold XAU= jumped 1% to $1,864.01 per ounce, while
U.S. gold futures GCv1 rose 0.9% to $1,866.90.
Experts caution that gold's relatively subdued performance
suggests silver's rally may not last long. An ounce of gold
currently buys 63.2 ounces of silver, versus 73.3 ounces on Jan.
25.
The market attention silver is receiving "highlights
silver's historically low price vs. gold", said Gregor
Gregersen, founder of Silver Bullion Pte Ltd, calling the recent
retail frenzy a "welcome demand catalyst."

Platinum XPT= gained 3.9% to $1,114.09 and palladium
XPD= rose 1.4% to $2,256.29.

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Holdings in the world's largest silver ETF, iShares Silver
Trust, spike to record peak https://tmsnrt.rs/3cpqJmB
Silver has outperformed gold in price terms and in ETF holdgings
in recent months https://tmsnrt.rs/39CYA9y
Gold-silver ratio falls to multi-year low https://tmsnrt.rs/39BU6jS
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