Pioneering silver tracker impresses
Pioneering silver tracker impresses
By Chris Floodand Kevin Morrison
Published: May 4 2006 03:00 | Last updated: May 4 2006 03:00. Copyright by The Financial Times
The world's first silver tracker fund has made a stronger start than expected, helping propel silver's price near to 23-year highs.
The iShares Silver Trust has already accumulated about 40m ounces of silver since its debut on the American Stock Exchange last Friday. That reflects strong buying of the fund, which tracks the silver price and makes it easier for investors to gain exposure to the metal without necessarily having to buy it physically.
The rate is much higher than UBS forecast. It said the fund would attract60m- 100m ounces in the first month.
Strong interest in the new silver fund helped send silver prices to $14.53 a troy ounce yesterday; just below the 23-year high of $14.68 reached two weeks ago. Prices slipped to $13.89 in late London trade, 38 cents below the previous close. Silver prices have doubled in the past year.
Gold struck a 25-year high point of $676.30 a troy ounce yesterday.
David Gornall, bullion and foreign exchange director at Natexis Metals, said higher silver prices had pushed up lease rates on the metal to about five per cent from three per cent in the past two weeks. The rise in lease rates increases the cost for fabricators wanting to use the metal for manufacturing.
Mr Gornall said despite fears the silver ETF might be reducing available silver in the market, more had flowed into London vaults in recent weeks: "It may be a case of less demand from the fabricators leaving more for investment demand."
Despite the high silver price, shares in some silver miners fell in response to Bolivia's threat to impose higher taxes and greater state control of mining companies. The threat follows action to nationalise the energy industry.
Apex Silver shares have dropped 20 per cent so far this week to $17.60. Apex is developing the vast San Cristobel silver and zinc mine in Southern Bolivia. Apex has nearly all of its assets in Bolivia.
Coeur D'Alene, the world's largest listed silver mining company, with about 30 per cent of its assets in Bolivia, has also felt pressure. Its shares were down 13 per cent at $6.22 in early afternoon New York trade.
Pan American Silver has a 55 per cent interest in San Vicente, a small mine. Its assets exposure to Bolivia is limited to low single digits. Pan-American shares are down per cent this week. Bolivia is a small silver producer with about 2 per cent of global mine output.
By Chris Floodand Kevin Morrison
Published: May 4 2006 03:00 | Last updated: May 4 2006 03:00. Copyright by The Financial Times
The world's first silver tracker fund has made a stronger start than expected, helping propel silver's price near to 23-year highs.
The iShares Silver Trust has already accumulated about 40m ounces of silver since its debut on the American Stock Exchange last Friday. That reflects strong buying of the fund, which tracks the silver price and makes it easier for investors to gain exposure to the metal without necessarily having to buy it physically.
The rate is much higher than UBS forecast. It said the fund would attract60m- 100m ounces in the first month.
Strong interest in the new silver fund helped send silver prices to $14.53 a troy ounce yesterday; just below the 23-year high of $14.68 reached two weeks ago. Prices slipped to $13.89 in late London trade, 38 cents below the previous close. Silver prices have doubled in the past year.
Gold struck a 25-year high point of $676.30 a troy ounce yesterday.
David Gornall, bullion and foreign exchange director at Natexis Metals, said higher silver prices had pushed up lease rates on the metal to about five per cent from three per cent in the past two weeks. The rise in lease rates increases the cost for fabricators wanting to use the metal for manufacturing.
Mr Gornall said despite fears the silver ETF might be reducing available silver in the market, more had flowed into London vaults in recent weeks: "It may be a case of less demand from the fabricators leaving more for investment demand."
Despite the high silver price, shares in some silver miners fell in response to Bolivia's threat to impose higher taxes and greater state control of mining companies. The threat follows action to nationalise the energy industry.
Apex Silver shares have dropped 20 per cent so far this week to $17.60. Apex is developing the vast San Cristobel silver and zinc mine in Southern Bolivia. Apex has nearly all of its assets in Bolivia.
Coeur D'Alene, the world's largest listed silver mining company, with about 30 per cent of its assets in Bolivia, has also felt pressure. Its shares were down 13 per cent at $6.22 in early afternoon New York trade.
Pan American Silver has a 55 per cent interest in San Vicente, a small mine. Its assets exposure to Bolivia is limited to low single digits. Pan-American shares are down per cent this week. Bolivia is a small silver producer with about 2 per cent of global mine output.
posted by Carlos T Mock at 8:36 AM
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