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Silver Investors' Faith in Benchmark Threatened by Market Misses

Monday, February 1st

"A daily silver price used as a benchmark by traders, miners and jewelers risks losing credibility with investors after it was set beyond levels traded on the market. One said the system seemed “broken” and another that clients had adopted alternatives.

The London Bullion Market Association Silver price was set at $13.58 an ounce Thursday, 3.5 percent less than the intraday low on the Comex in New York. On Friday, the LBMA price fixed at $14.08, about 1 percent under the level the spot metal was then trading at and less than the lowest intraday price in the futures market. 

“For the second time, we have seen a big discrepancy on the price,” Afshin Nabavi, head of trading and physical sales at MKS (Switzerland) SA, said from Geneva on Friday. “People are going to lose all faith in the fix if this keeps going.”

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