India’s soaring silver sales could lose their sheen amid confusion about the price for the precious metal as banks in London have decided to scrap the benchmark price Indian traders have been using for more than a century, the Wall Street Journal reported today.
Most of India’s silver trading is based on a benchmark price for silver called the London’s “silver fix,” which was set every day by four banks in London. In the $30 billion global silver market the widely used benchmark affects the price of jewelry as well as derivative contracts and impacts the earnings of mining companies. MetalMiner Co-Founder Stuart Burns wrote about the adverse effects that ending the silver fix and its cousin, the gold fix, could have on markets earlier this month.
In August, the fix is being discontinuted as some of the banks that set it have pulled out of the process as the fix is being scrutinized by regulators as part of a broader probe of financial benchmarks.
On Tuesday, May 20, the day’s biggest mover was Indian silver, which saw a 2.9 percent decline to INR 41,581 ($712.23) per kilogram. The price of US silver declined 0.6 percent to $19.34 per ounce. The price of Chinese silver flattened at CNY 4,140 ($663.83) following two-days of declines. The price of Japanese silver remained steady at JPY 642.00 ($6.33) per 10 grams.
US gold bullion closed 0.3 percent lower at $1,293 per ounce. The price of Chinese gold bullion fell 0.2 percent to CNY 259.84 ($41.66) per gram. Japanese gold bullion finished the day down 0.2 percent to JPY 4,224 ($41.62) per gram. The price of Indian gold bullion is back up, rising by 0.1 percent on Tuesday to close at INR 27,488 ($470.83) per 10 grams.
Chinese platinum bar saw its price rise 0.3 percent to CNY 312.00 ($50.03) per gram. At JPY 4,791 ($47.20) per gram, Japanese platinum bar fell 0.3 percent on Tuesday. The price of US platinum bar remained essentially flat at $1,464 per ounce.
Chinese palladium bar prices rose 0.5 percent to CNY 185.00 ($29.66) per gram. After a 0.5 percent increase, US palladium bar finished the day at $813.00 per ounce. Japanese palladium bar held its value yesterday at JPY 2,687 ($26.47) per gram.