Silver price: Swiss regulator fines UBS for manipulation of precious metals fixing

on Nov 13, 2014
Updated: Apr 9, 2020
Listen, Wednesday, November 12: The price of silver has seen little change so far in today’s session. Traders have decided to remain on the sidelines after precious metal sentiment took a hit yesterday after a Swiss regulator fined UBS for silver price manipulation.

Silver for immediate delivery had eased 0.1 percent, or about two cents, to $15.64 as of 08:35 GMT today, and was trading 9.5 percent below its 50-day simple moving average of $17.28. It has stabilized over the past few days in a safe distance from Friday’s $15.04 four-year low. The price has declined over 20 percent since the beginning of the year.
The Swiss Financial Market Supervisory Authority (FINMA) announced yesterday that it had found evidence of ’serious misconduct’ by UBS employees in precious metals trading, most noticeably in silver, during an investigation of the bank’s foreign exchange and precious metal trading operations.

Traders had used electronic chat media to front run silver prices, meaning that they had been illegally employing their insider knowledge on upcoming silver transactions in order to profit from price-sensitive dealings.
“”We have also seen clear attempts to manipulate fixes in the precious metals markets””
FINMA director Mark Branson said investigations had shown the problems at UBS went beyond currency trading. “The behaviour patterns in precious metals were somewhat similar to the behaviour patterns in foreign exchange,” Branson said in a conference call following the announcement. “We have also seen clear attempts to manipulate fixes in the precious metals markets.”

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Regulators in Switzerland, the UK and US yesterday ordered UBS and five other banks to pay about $4.3 billion (£2.73 billion) to settle a probe into the rigging of foreign-exchange rates, including a 134 million Swiss franc penalty that FINMA slapped on UBS, Switzerland’s biggest bank. RBS share price: Lender fined alongside peers after forex probe

The price of silver for December delivery was up four cents at $15.68 as of 09:10 GMT on the COMEX in New York. The contract reached $15.04 on Friday, the lowest since February 2010. According to a report by Scotiabank, recent resistance on a closing basis was around the 9 day MA of $15.76.
“Positive divergence –momentum indicators failing to confirm new price lows –suggests a need for near term caution.”
Based on the most actively traded COMEX contracts, those for December delivery, with a total volume of trade in gold and silver at 77,250 contracts as of 09:10 GMT today, the gold:silver ratio was at 74.01. The recent rise of the ratio above 74 is the highest since March 2009.


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