Commodities: Shine on Silver

At quarter past noon every working day, half a dozen agents from London's three big bullion dealers meet in the teak-paneled board room of Sharps, Pixley & Co., for a gentlemanly haggle that sets the price of silver in Britain—and much of the rest of the world. Last week every one of the agents was saying the same: "I'm a buyer—not a seller." With that, the price of silver hit a 42-year record of $1.14 per oz. in London, also advanced to $1.13 in New York City, which is the world's other major market.

Behind silver's spectacular rise lay two...