Gold News

Silver Investment "Rises 6-Fold" in 10 Years as Source of Demand

Share of global silver demand jumps to almost one ounce in every four...
SILVER INVESTMENT now accounts for 24% of the annual market, according to the leading data providers, up from 4% in 2003.
Presenting the latest Interim Report from Thomson Reuters GFMS at last night's Silver Institute dinner in New York, "Physical investment demand surged this year," said Andrew Leyland, forecasting 19% year-on-year growth for silver investment coins and medals from 2012.
Overall, total fabrication demand is set for a 4% rise this year, reckons the London-based GFMS precious metals consultancy – acquired by the Thomson Reuters news and data group in 2011.
Silver investment's growing share of total demand has been mirrored, according to Leyland's charts, by the decline in photographic use since 2003, down from 25% to 5%.
Formerly the largest single industrial use of silver, "Photographic demand for silver continues to decline," says GFMS, "as part of its secular trend as consumers switch towards digital technology."
The US Mint said separately on Tuesday that its 2013 American Silver Eagle coin sales have now overtaken full-year 2012 to hit fresh record highs.
"Authorized purchasers bought the full weekly allocation of 500,000 coins," Bloomberg reports, quoting the Mint, "boosting the total this year above the previous all-time high of almost 39.9 million ounces in 2011."
Looking at silver investment prices, however, "One of the defining characteristics of the silver market is its display of duality," Leyland told the Silver Insititute attendees Tuesday night in New York, "at times closely shadowing developments in the gold market and at others, taking cues more from the industrial world.
"This trend is forecast to continue into 2014."
As with gold, now down 24% in 2013 so far, the "primary driver" behind the 31% fall in silver prices has been "talk of QE tapering, the improved economic outlook, and more attractive returns in other [investment] asset classes," the consultancy's interim report goes on.
Noting the disparity between falling holdings in exchange-traded gold trust funds and the equivalent silver ETFs, "Silver's greater volatility and trading range than gold makes it attractive to certain investors," GFMS concludes of the investment space.
"For some, silver is a more 'economical' alternative to gold."

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