London Gold & Silver Trade at 20 Month High

May 31, 2013 at 06:39

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London gold trading jumped to a 20-month high in April and silver volumes surged 25 percent after a plunge in prices for both precious metals spurred an increase in physical buying, the London Bullion Market Association said.

Trading in gold averaged 24.1 million ounces a day in the London market, the most for any month since August 2011, the LBMA said in a statement e-mailed today. The total compared with 21.8 million ounces a day in March. Silver volume was 165.2 million ounces a day, up from 132.5 million ounces in the previous month. There were 5,395 gold transactions on average per day, the highest on record, while silver transfers at 1,007 a day were the second-highest ever, according to the report.

Gold fell 14 percent in London in the two trading sessions ended April 15, the biggest drop in more than 30 years, on speculation that Cyprus or other European countries would sell holdings in the precious metal, the LBMA said. The price rebounded as much as 13 percent through early May as demand increased for gold coins and jewelry. Assets in exchange-traded funds backed by gold fell 18 percent this year to 2,152.7 metric tons yesterday, the lowest since June 2011, data compiled by Bloomberg show.

“April was characterized by continued offloading of both metals by ETF funds,” the LBMA said. “But this was more than offset by strong physical demand, particularly from India,” the world’s biggest consumer.

Assets in exchange-traded funds backed by gold fell 174 metric tons in April, the biggest drop on record. Silver ETF assets dropped by 1.4 percent in April and 2.3 percent in May.

Gold demand in India is set for a quarterly record as imports head for 300 to 400 tons in the second quarter, the World Gold Council said in a report yesterday.

Gold traded at $1,411.60 an ounce today in London, heading for a 4.4 percent loss in May, a second-straight decline. Prices are down 16 percent this year. Silver for immediate delivery was at $22.9425 an ounce, down 5.7 percent in May and 24 percent so far in 2013.

The value of gold transferred in April increased about 3 percent from the previous month to a daily average of $35.8 billion, the LBMA said. Silver values climbed about 9 percent to $4.17 billion a day.