Silver highest in a month; gold tops $1,300 level

May 14, 2014

San Francisco (May 14)  Silver prices settled at their highest level in a month on Wednesday, buoyed by a report that said physical demand for the metal rose to a record last year following news that London Silver Market Fixing Ltd. will end its silver price fixing in mid-August.

Gold prices, meanwhile, topped $1,300 an ounce on the back of a decline in U.S. equities, with some analysts attributing to Ukraine worries and the potential for stimulus measures in Europe.

July silver  rose to $19.78 an ounce on the Comex division of the New York Mercantile Exchange. That was the highest settlement for a most-active contract since April 14.

Total physical silver demand rose by 13% in 2013 to an all-time high, the survey said, with the rise primarily driven by the 76% increase in retail investment in bars and coins and a sturdy recovery in jewelry and silverware fabrication.

The silver report has also “confirmed our expectations that total identifiable investment demand, which includes physical bar investment, coins and exchange traded funds (ETF) inventories, rose by 27% to a three-year high at 247.2 Million oz last year,” said Julian Phillips, founder of and contributor to

Separately, the London Silver Market Fixing Ltd. said it would no longer publish the London Silver Fixing, with effect from the close on Aug. 14.

Following the announcement, the London Bullion Market Association said it “launched a consultation in order to ensure the best way forward for a London silver daily price mechanism.”

Deutsche Bank had resigned from the panel that sets the gold and silver fix prices. The benchmark was set by a conference call between Deutsche Bank, HSBC and Bank of Nova Scotia. Deutsche Bank said it has postponed its resignation from the fix until it ends in August, The Wall Street Journal reported.

“Silver has followed gold almost ‘in tandem’ for the last few years and continues to do so,” Phillips said. “The investment demand shown in these figures shows this now in the numbers. I believe it will continue to do so.”

Gold tops $1,300

Gold prices also got a boost Wednesday, with prices closing back above $1,300 an ounce.

Gold futures traded higher “in part due to weakness in [U.S.] equities,” said Tyler Richey, an analyst for the 7:00’s Report, which offers daily markets commentary. “Gold has maintained an inverse relationship with stocks and acted as a solid hedge most of the year, rallying sharply on pull backs in the stock market.”

Gold for June delivery rose $11.10, or 0.9%, to settle at $1,305.90 an ounce on Comex. That was the first settlement for a most-active contract above $1,300 since May 6.

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