Silver settled just short of $50 an ounce after a big price swing Monday as the precious metal draws in investors worried about inflation ahead of a meeting this week by the Federal Reserve's policy-making committee.
Silver for May delivery rose $1.09 to settle at $47.149 an ounce after swinging from a low of $45.65 an ounce to a high of $49.82 an ounce. The price has risen 52 percent since the first of the year.
Investors are monitoring the movement of the dollar ahead of the Federal Reserve's meeting on Tuesday and Wednesday.
The policymakers are expected to say they will keep interest rates near zero and that their $600 billion bond-buying program will continue until its scheduled end in June. The Fed's rates have kept the dollar's value low as other central banks begin to raise interest rates because of inflation fears.
Since commodities are priced in dollars, a weak dollar makes them more of a bargain for buyers who use other currencies.
Silver draws a diverse group of investors because of its dual purposes. Along with gold, it is a precious metal sought out as a stable asset during unsettled times and as hedge against inflation. Silver also is used making a number of consumer products including LCD televisions to smartphones and jewelry.
The combination can make silver prices more volatile because the market for the metal is smaller, resulting in more exaggerated price swings.
If silver reaches $50, it would be a new level in dollar terms but still below the peak reached in the 1980s after accounting for inflation.
Investors also bought gold for June delivery, which rose $5.30 to settle at $1,509.10 an ounce.
In other metals contracts, May copper fell 9.7 cents to settle at $4.303 a pound, July platinum rose $7.40 to $1,828.10 an ounce and June palladium fell $8.25 to $760.80 an ounce.
In energy trading, benchmark crude for June delivery fell 1 cent to settle at $112.28 per barrel on the New York Mercantile Exchange.
In other Nymex trading, heating oil lost 1.73 cents to settle at $3.1989 per gallon, gasoline rose 0.62 cent to $3.2785 per gallon and natural gas fell 2.3 cents to $4.389 per 1,000 cubic feet.
Most agriculture contracts settled higher. In contracts for July delivery, wheat rose 26.5 cents to settle at $8.6125 a bushel, corn rose 24 cents to $7.685 a bushel and soybeans rose 6.75 cents to $13.965 a bushel.