Silver price backs off on Crimea vote overwhelmingly in favour of joining Russia

San Francisco (Mar 17)  Participants in the Crimean referendum yesterday voted by a wide margin in favour of leaving Ukraine and joining the Russian Federation, in a move which Western leaders have repeatedly called a clear violation of international law.

The biggest standoff between Russian and the West since the Cold War has been supporting the price of silver due to its safe-haven appeal. But the commodity has so far today shed some cents in typical 'buy the rumour, sell the news' fashion, given the widely anticipated outcome of the referendum.

Reuters has reported sources in Crimea as claiming the turnout at 83 percent of registered voters, with nearly 96 percent selecting the option of accession to the Russian Federation. In Moscow, the vote is being touted as an expression of the will of the Crimean people but the stance of the United States and European Union continues to be that the referendum was illegitimate.

Russian Federation president Vladimir Putin yesterday defended the vote in phone calls with German chancellor Angela Merkel US president Barack Obama, saying it complied with international law.

“It was emphasized that Russia will respect the choice.

 However, the White House said that “this referendum is contrary to Ukraine’s constitution, and the international community will not recognize the results of a poll administered under threats of violence and intimidation from a Russian military intervention that violates international law”.

The US called on the international community to “take concrete steps to impose costs” against what the US administration sees as Russia’s effective annexation of Crimea. The EU yesterday said in a statement that officials would meet today in Brussels to “decide on additional measures”.

Although gold rose overnight UTC to a 27-week high of $1392.5, silver has struggled to keep up with the yellow metal’s lead and stalled at around $21.65, well below Friday’s high of $21.81.

Silver has been underperforming gold so far in 2014, appreciating less than 10 percent year-to-date versus gold’s near 15 percent return. This shows that gold is very much in the driving seat of the precious metals rally. Traders in silver will be keeping a close eye on how gold reacts once the price nears the $1400 handle.

Right now, silver is trading at around $21.387, down 0.74 percent intraday.