Silver unlikely to repeat 2011 performance

Record levels of silver investment demand, focused mostly on the physical metal, coins and bars, drove average prices for the metal to record highs last year, although a repeat performance is not likely in 2012.

According to the World Silver Survey 2012, the average price for the metal that is best known for its use in jewellery and coins was $35.12 per ounce last year.

“If you look at the silver investment last year it obviously took several forms, particularly in the price move that began in Aug. 2010 and ended in April 2011,” said Philip Klapwijk, of the London-based Thomson Reuters GFMS, the metals research company that researched and compiled the 18th annual World Silver Survey.

“I don’t think that we’re going to see an investor move on such a scale this year that is going to see prices reach the levels they did in 2011,” he added in an interview. “ I think we are more comfortable with an upside this year in the low $40s rather than any higher than that.”

The silver(SI-FT31.670.180.58%)market tends to shadow the much larger market for gold, which climbed to new heights in recent years as a safe haven for investment in the global economic crisis of 2008/09.

In late April last year, silver prices briefly touched $48.70/ounce, driven higher as financial institutions bought silver to honour out of the money call options and retail investors joined the charge on expectations prices could go still higher.

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Tags: Silver, Silver future prices, silver futures, silver price, silver price 2012, silver price forecast, silver prices

Posted by Silver Guru on Apr 19 2012. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry