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Silver Bars Ordered by HSBC—To Buy $876 Million Worth

Following a touch of the four-week high following yesterday’s session, the price of gold reacted to the bill passed by the House of Representatives that will provide a four-month extension to the debt ceiling expiration.

In trade the price of gold touched $1,695.76 per troy ounce yesterday, close the important $1,700 per troy ounce level, before the debt ceiling extension brought prices back a bit as investors pursued equities on an increased sentiment of confidence in the U.S. economy.

The spot price of silver continued to gain as an effect of its industrial application, which tracked commodities higher on the confidence. U.S. silver futures gained $0.16, or 0.52 percent, to $32.34 in late Wednesday trade.

Amid the price action, which includes a seven-day rally in silver, HSBC has quietly moved into acquiring large amounts of silver bullion. The bank has secured another deal to buy silver bars from KGHM, which will bring total purchases of silver from KGHM alone in the past twelve months to $876 million.

KGHM is one of the largest producers of silver in the world and is the second-largest producer of refined silver in the world.

Other indications from markets show the fundamentals behind the large purchase. Analysts polled by Reuters expect silver to rise in value in 2013, with a significant prevailing majority over those who see no increase or a sideways market. The price of silver has rallied 6 percent so far this year and 4.5 percent last week alone. The next resistance level, following this week’s breach of the $32.00 per troy ounce level, is a close above the resistance at $34.00 per troy ounce.

Interestingly, the U.S. Mint has sold out of it 2013-dated American Eagle Silver Coins just ten days after the series was initiated for order. This is the third time the Mint has had to temporarily suspend sales of its silver coins, after 2009 and 2010, and it will resume them possibly the week of January 28 when it will fill orders on an allocation, or rationing, basis.

The Mint also sold out of its 2012-dated American Eagle Silver Coins. The sell out date of December 17, 2012 was the beginning of a three-week hiatus when the American Silver Eagle was unavailable for order from the U.S. Mint to its network of authorized distributors.

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