Silver Market In Disarray After Benchmark Price Fix Manipulation
by Jon Cavuoto
January 29, 2016
As Bulliondesk.com’s Ian Walker reports, the silver market was thrown into disarray on Thursday
After the LBMA Silver Price was set 84 cents below the spot and futures price this morning.
The LBMA Silver Price – the crucial daily benchmark used by producers and traders around the world to settle silver products and derivatives contracts – was set at $13.58 per ounce.
At the time of the auction, which begins at 12 noon London time, the spot price was at $14.42 per ounce while the futures price on the CME was at $14.415, leaving a number of market participants extremely confused as to what has happened.
“Unfortunately, it is not [a mistake],” Ole Hansen, head of commodity strategy for Saxo Bank, told FastMarkets. “This could be the end of the fix. It took 14 minutes to find a fix – they obviously found a fix way off of the market.”
The difference between the two was nearly six percent but the benchmark cannot be changed, a person familiar with proceedings told FastMarkets.
I had quite a number of readers send me this Zero Hedge piece, but Richard Saler was the first person through the door with it—and as I said earlier, Ted’s comments were that “there was mini flash crash on Globex last night, but this [commentary] looks like typical ZH nonsense.” They said the noon fix was $13.58—but if that’s the case, why was the CME Group’s low print of the day $14.07—and the embedded ‘click to enlarge’ silver chart confirms that. Lots of question with no answers. But will we get any? My impression is that this story should be read for entertainment purposes only until we have some more facts. As I said earlier, I’ll have more in The Wrap.