Unfixing the Silver Fix

For a 117 year span, the London Silver Market Fixing Limited has been setting a A.M. price fix on Silver. It has become the industry standard worldwide to use to the London fix price for the vast majority of buying and selling. While there is the spot market which is open and trades live, the logistics of agreeing on a exact time of a transaction can be hard for many businesses. This is solved by having a set price every day.

With the rise of a digital market that is available around the clock, as well as increased availability of knowledge and news, there has been a increased amount of scrutiny of the Silver fix price. Getting any group to agree on a fair Silver price and for what reasons will always be hard with so many contributing factors. There have also been many allegations of interference, price manipulation, insider trading, or other corruption as far as the Silver price.

The Deutsche Bank, HSBC and Bank of Nova Scotia will stop issuing a Silver fix after Aug. 14. This three months will give businesses and investors a chance to explore other alternatives for pricing Silver. There have already been interests in a few different price fixing models that use direct market data and are a bit more transparent as far as the reasons for the Silver fix price.

The good news in all of this is that we may end up with a more reliable source for accurate Silver prices, and one that is market based that is not able to be manipulated by an individual or company. It will be interesting to see how this will effect the price of Silver as well as physical Silver investment, since most of this was done using the London Silver Fix.

All of this news comes the same day as the news that the Silver trade data came out. The trade data said that investment was up especially in the physical sector, scrap Silver sales are down so less metal is reentering the market, and that Silver in a deficit of production of over 100 million troy ounces.