Silver and gold surged to record highs yesterday on speculation China will buy precious metals to diversify its foreign exchange reserves.
The country, with more than $3 trillion (£1.82trn) in reserves, plans to set up new funds to invest in energy and precious metals, reported Century Weekly magazine.
Silver for immediate delivery jumped to a record $49.79 an ounce, and gold reached $1,518.32 an ounce.
"People are expecting China to be a major buyer of precious metals," said Adam Klopfenstein, a senior strategist at Lind-Waldock in Chicago.
"Gold is piggybacking on silver. You're seeing a blow-off rally in silver, but we don't know when the bubble gets popped."
On the Comex in New York, silver futures for May delivery rose $1.393, or 3%, to $47.47.
Earlier, the price climbed as much as 8.2% to $49.845.
The metal reached a record $50.35 in January 1980 as the Hunt Brothers tried to corner the market.
Commodities have reached the highest level since 2008, partly on demand for a hedge against inflation. Gold and silver have rallied amid sovereign-debt concerns in the US and Europe.
Silver has posted the biggest gain in 2011 among 19 raw materials in the Thomson Reuters/Jefferies CRB Index.
The dollar has dropped for four straight weeks against a basket of major currencies.
The US Federal Reserve may keep borrowing costs at 0% to 0.25%, while ECB officials signal further rate increases.
Fed chairman Ben Bernanke will hold a media conference after the Federal Open Market Committee statement following a two-day meeting in Washington.
"The disdain for currencies generally and the need to embrace precious metals is still very strong," said Dennis Gartman, an economist and the editor of the Gartman Letter.
Before yesterday, spot silver had more than doubled in the past year, while gold had increased 32%.
"Silver in the long run really will end up in a bloodbath, but in the short term, the market loves it," Dominic Schnider, a Singapore-based director of wealth-management research for UBS, said.
The commodity's relative-strength index, which may signal a decline above 70, was more than 89.