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One man starts silver rally
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February 4, 1998: 5:26 p.m. ET
Silver prices surge as U.S. investor buys 1/5 of world's annual supplies
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NEW YORK (CNNfn) - Silver prices soared to 9-1/2-year highs Wednesday following news that billionaire investor Warren Buffet had bought about a fifth of the world's annual silver supply.
Buffet used his Berkshire Hathaway [BRK.A] [BRK.B] investment firm to buy 129.7 million ounces of silver, worth about $900 million over six months. His company later issued a statement saying it had no plans to buy or sell any more silver at this time.
Buffet's announcement sparked a rally in silver prices around the world, driving the actively traded March silver futures in New York up 40.5 cents to $7.02 an ounce.
Silver prices had already risen about 16 percent since last Thursday and more than 60 percent since mid-1997, and declining supplies of the white metal prompted allegations that its price was being manipulated by a commodities trading firm in New York.
A lawsuit filed in federal court in New York alleged that Phibro Inc., the commodities trading arm of Salomon Smith Barney was manipulating the price of silver. Phibro vigorously denied the allegation, and the New York Mercantile Exchange, on whose COMEX division silver futures in New York are traded, said there was "absolutely no basis" for allegations of manipulation.
Later Phibro confirmed it was the broker Buffet used to buy his silver stockpile.
Rising silver prices helped boost other precious metals in New York, with the actively traded gold for April delivery rising $4 to $301.2 an ounce.
The silver rally also led to gains in the shares of silver mining companies. Among them, Apex Silver Mines (SIL) rose 1-9/16 to 12-7/8, Hecla Mining (HL) gained 1-1/16 to 5-7/8, and Coeur d'Alene Mines (CDE) jumped 1-15/16 to 10-13/16. 
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