All Eyes on Fix Alternatives as Silver Slips Below $19

Silver began the week on a fairly high note, but unfortunately for fans of the white metal, reduced Russia-Ukraine tension and positive economic data out of the United States have since killed its buzz.

A US holiday on Monday brought some stability for silver, which saw little movement throughout the day. Indeed, after hitting $19.47 per ounce, its highest price so far this week, early that morning, the precious metal closed only slightly lower, at $19.44.

The next day, however, silver took a big fall. It hit $19.05 midway through the day on the back of the aforementioned positive US economic data and “signs of de-escalation” in the Ukraine crisis, as per iNVEZZ.com. Specifically, the news outlet states, Ukraine’s election of billionaire chocolate manufacturer Petro Poroshenko and the Kremlin’s willingness to work with him took away some of silver’s shine.

Wednesday, the white metal stayed steady around the $19 mark, closing at $19.02 after making a brief foray to $18.95. Today was much the same. Though silver slipped below $19 again, this time hitting $18.83, it was ultimately able to pick itself back for a close of $19.04. iNVEZZ.com again cites “improving economic conditions in the US” and “a thawing in relations between Russia and Ukraine” as reasons for the white metal’s lackluster performance.

Silver fix saga continues

By now, market participants are well aware that the London Silver Market Fixing will cease to administer the London silver fix at the end of the day on August 14, 2014. However, as Silver Investing News discussed last week, it’s less clear what, if anything, will replace it.

This week, the picture became a little clearer. Mineweb reported yesterday that Kitco has begun publishing a daily silver fix at 10:00 a.m. EST, and today Reuters said that the London Bullion Market Association (LBMA) has “launched a consultation to find a solution.” The consultation will close tomorrow, and while few details have been released, the news outlet notes that the organization has been working with the Chicago Mercantile Exchange and London Metal Exchange “to find an electronic-based solution.”

Reuters also notes that Platts and Thomson Reuters are “in talks with the LBMA and looking to provide feasible solutions to the market.”

Company news

Avino Silver and Gold Mines (TSXV:ASM,NYSEMKT:ASM) today reported its financial results for the first quarter of 2014, noting that revenues increased 65 percent from the year-ago period, hitting $5,774,127. In terms of production, the company put out 232,401 ounces of silver and 1,274 ounces of gold; respectively, those are increases of 46 and 122 percent from the first quarter of 2013.

David Wolfin, the company’s CEO and director, said, “I am proud to report that 2014 is shaping up to be a year of impressive growth for Avino. With a solid first quarter that featured record production and significant cost reduction now in the books, we are excited to see this trend continue and gain momentum as we work towards completing our expansion.”

Junior company news

Kootenay Silver (TSXV:KTN) said on Wednesday that it has finished a strategic hand trenching and chip sampling program at its La Negra silver prospect, located near its flagship Promontorio silver resource in Sonora, Mexico.

Commenting on the future of La Negra, James McDonald, president and CEO of Kootenay, said, “[w]e are very excited to proceed to the next phase of work on La Negra. Through further exploration, trenching and drilling, the goal of the upcoming program will be to establish the grade continuity and extent of silver at surface and at depth, to begin ascertaining the size and average grade of the contained mineralization.”

Today, Solitario Exploration & Royalty (TSX:SLR,NYSEMKT:XPL) provided an update on its Mexico-based Pachuca Norte silver-gold project and its Pedra Branca platinum-palladium project, located in Brazil.

In terms of the former, the company said that Hochschild Mining (LSE:HOC), which recently completed a core drilling program at Pachuca Norte, has decided to terminate its option to earn an interest in the project. Solitario now plans to consider “whether to continue independent exploration, seek a new joint venture parter, or reduce its land holding in the project.”

 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Related reading: 

The Silver Fix is Dead, Long Live — What Exactly?