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NEW YORK: Silver rose more than 2% on Wednesday on bets for a pick-up in industrial demand, regaining some ground following a sharp retreat from a near eight-year peak scaled with the help of a social media-inspired buying frenzy.

Spot silver rose 1.1% to $26.89 per ounce at 12:07 a.m. EST (1707 GMT). It fell more than 8% on Tuesday.

The recent moves have attracted a lot of new interest in silver, “not necessarily Reddit investors, but just people out there looking at silver as an undervalued asset,” said Bob Haberkorn, senior market strategist at RJO Futures.

“There is an increased physical demand for silver at this point.”

Prices surged to $30.03 on Monday after retail investors attempted to replicate a GameStop style rally. The buying spree left silver dealers scrambling to find supplies of coins and bars.

The frenzy fizzled, partly after the Chicago Mercantile Exchange hiked margins for holding silver futures to rein in the market gyrations.

Analysts expect some volatility to continue.

US Treasury Secretary Janet Yellen has called a meeting of top officials that could clamp tougher markets regulation for hedge funds, small investors and stockbrokers.

While silver moves in tandem with safe-haven gold under normal circumstances, it also closely follows economic cues because of its industrial applications.

A weaker dollar and expectations of strong economic activity, amid easy monetary policy globally, make “a strong argument to see higher silver prices,” and the recent buying frenzy “made it much faster than expected,” UBS analyst Giovanni Staunovo said.

Reflecting sentiment, holdings in iShares Silver Trust, the largest silver-backed ETF, jumped by a record 57.8 million ounces.

Spot gold fell 0.1% to $1,834.93 per ounce. US gold futures added 0.2% to $1,837.40.

A steepening US Treasury yield curve and a jump in equities are pressuring gold, said Daniel Ghali, commodity strategist at TD Securities.

Platinum rose 0.7% to $1,102.16 and palladium gained 1.3% to $2,271.59.

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