BOTH GOLD and Silver Prices have benefited from the financial crisis and ensuing sovereign-debt concerns, says a new report from a much-followed bank analyst, but recent action shows "a growing preference" for silver amongst some investors.
Silver Bullion prices "have gained noticeably on gold this year," notes HSBC metals analyst James Steel in his latest Precious Metals Outlook.
This means that the ratio of gold to Silver Bullion prices per ounce – known as the Gold/Silver Ratio – has fallen from 1:63.5 in January 2010 to 1:56 by October, says Steel.
Amid a clear move to hard assets, led by precious metals, "This indicates a growing preference for silver over gold by some investors."
On the supply/demand fundamentals, silver mine supply is expected to continue rising, but jewelry demand "is recovering" from the slump of 2009, and industrial demand – which accounts for more than half of silver's annual off-take, according to HSBC – remains "price inelastic" and "will sustain physical silver demand."
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