The price of silver was given a boost last week when American investment guru Warren Buffet announced that his company, Berkshire Hathaway, had taken a large stake in bullion silver.
The price of the metal jumped to more than US$7 per oz. on the Comex division of the New York Mercantile Exchange on news that Buffet had purchased 129.7 million oz. silver between July 1997 and January 1998.
During January, Berkshire accepted delivery of 87.5 million oz., and retains contracts for another 42.2 million oz. for delivery at various times through March 6, 1998.
The company disclosed the information because of recent price movements in the silver market and because it has received inquiries about its ownership of the metal. Normally, the company would have furnished the information next month in its annual report.
All of the silver was purchased through one brokerage firm, reported by other sources to be Phibro, the commodities-trading arm of Travelers Group’s Salomon Smith Barney.
Phibro is the subject of a lawsuit, filed in New York by a firm representing Kerry Seale of Vancouver, alleging the trader manipulated the market by artificially reducing visible supplies of silver. Buffet and Berkshire Hathaway were not included in the allegations.
Share of silver stocks surged on the news of Buffet’s investment. On the New York Stock Exchange, both Coeur d’Alene Mines (CDE-N) and Hecla Mining (HL-N) gained 22%, while Sunshine Mining & Refining (SSC-N) gained 39% on trading of more than 11 million shares on Feb. 4.
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