Rises in the price of silver and gold traditionally lead to greater amounts of antique and vintage items being scrapped.
Image: iStock Jaanalisette.
While the price of gold has been strengthening for some time, silver values have spiked over recent days with demand far outstripping supply across the world’s markets.
Analysts have pointed to a combination of geopolitical fears relating to tariffs and US-China trade tensions, together with reduced mining output and investors and exchange-traded funds (ETFs) rushing into the sector fearing they may miss out on a rising market, as among the chief reasons for the steep rise in prices.
The silver price on the London market rose above £40 per troy ounce on both October 14 and 17, the highest level since ‘silver Thursday’ in 1980 when the price collapsed after American billionaire Nelson Bunker Hunt and his two brothers unsuccessfully attempted to corner the world silver market.
The current spike has led to fears that a market correction would leave bullion traders unable to cover their futures, something exacerbated by supply of physical silver becoming increasingly squeezed.
As a result, many dealers have suspended new trades and jewellers are halting fresh bookings. Gerrards Precious Metals of Hatton Garden had a notice on its website stating that all silver scrap buying has been suspended until further notice.
Brighton-based precious metals dealer Michael Bloomstein told ATG he had temporarily stopped buying and selling silver for the first time in 45 years. “Many dealers are in a state of shock and the banks are edgy,” he said. “The silver market seems out of control currently and it feels a bit like the Bunker Hunt days.”
He added he would restart buying silver only once “the usual trading mechanisms resume”.
Melt down
With the price of silver so high, many items at auction are now failing to fetch any more than their scrap value – meaning vendors may be advised to consign items directly for scrap rather than receive a lesser amount after the salerooms’ fees are factored in.
Bloomstein said while many pieces of standard Victorian silver had been consigned for scrap over a number of years now, recently more elegant and collectable items such vesta cases and antique silver canteens were heading to the melt.
“My family has been dealing in silver for four generations. Items that would have once found pride of place in the shop window are now heading for scrap. My forebears would be amazed.”
Meanwhile in the US, large volumes of antique silver are also being scrapped. One member of the American silver trade reported that refiners in the US were full and not taking in any more silver.
In terms of the gold market, the fix in London went over £3000 for the first time last week and reached an all-time high today of above £3200.
With vendors receiving over £75 per gram of 18ct gold, Bloomstein said he was receiving more items for scrap which previously would have gone back into market, such as a William IV snuffbox which now had a scrap value of nearly £5000.
