Silver prices rose more than 2% in the previous session as inflows into exchange-traded funds backed by the metal recorded their strongest week since July. Gold rose slightly. The white metal fell to around $58 an ounce on Monday, after earlier jumping to one dollar away from a record high. Total holdings of silver-backed funds rose by about 590 tonnes last week, in a strong bet by investors that the metal’s rise is far from abating, despite fears of an exaggerated rise in its price. The recent rise in the price of silver, which peaked at $59.33 on Friday, was supported by growing expectations that the Federal Reserve will cut interest rates this week, boosting the non-yielding precious metal. The market is still dealing with the repercussions of the historic selling pressure seen in London. Also read: Who caused the record price of silver to rise? Ask Solar “The current rally appears to be already excessive, and individual investors are showing some momentum-chasing behavior,” said Justin Lin, an investment analyst at Global X Management in Sydney. Supply shortage raises prices The value of silver has more than doubled this year, with the rally gaining momentum since the severe shortage in October. Lending rates, which represent the annual cost of borrowing the metal in London, remain high at around 6%, even after a record amount of the metal poured into the world’s biggest silver trading centre. These inflows have pressured other centers, with inventories in Shanghai approaching their lowest levels in a decade. Also read: Why did the price of silver rise more than the price of gold? As additional support for the metal, silver options on the COMEX exchange saw a wave of buying as investors sought to hedge against broad swings, especially against further gains. Retail traders flocked to the market, with the five-day average trading volume on mini contracts reaching a level not surpassed until mid-October, according to CME Group data. Meanwhile, the Chinese Central Bank added to its gold reserves for the thirteenth month in a row, according to data released on Sunday, bringing the total to about 74.12 million ounces. Silver fell 0.2% to $58.2268 an ounce as of 09:04 Singapore time. Gold rose 0.2% to $4,205.21 an ounce, after falling about 1% last week. The Bloomberg Dollar Spot Index fell 0.1%. Platinum rose, while palladium fell.