DJ Rising Silver Prices Buoyed By Investor Demand - Analyst
TORONTO, Mar 02, 2008 (Dow Jones Commodities News via Comtex) --
By Monica Gutschi Of DOW JONES NEWSWIRES
Investor and industrial demand for silver is easily outweighing a drop in consumer buying of the precious metal, an analyst with CPM Group said Sunday.
Speaking at the Prospectors & Developers Association of Canada's annual convention, Jeffrey Christian said silver is also benefitting from the macroeconomic factors that are driving gold prices higher: a weak U.S. dollar, a flight to quality sparked by the credit crisis, and the threat of rising inflation. In addition, he noted, it is an industrial metal in short supply and with no real stockpiles in bullion.
Silver prices touched $19.80 an ounce in mid-February and are likely to reach $22 a ounce this year, Christian said. On an inflation-adjusted basis, that would be equivalent to the $48 an ounce record reached in 1980.
Those price gains will come despite a forecast increase in new mine production and growing availability of scrap driven by tighter government regulations on electronics recycling. Sales of silver jewelry have dropped as well.
India, which is a major consumer, purchased 3 million ounces less in silver jewelry in 2007 than in 2006. Nevertheless, Christian said prices are being pushed higher as investors are now net buyers of physical bullion and futures. Sales of silver bullion and coins rose by 6.4 million ounces last year, he said.
Related Web Site: http://www.pdac.ca
-Monica Gutschi, Dow Jones Newswires; 416-306-2017; monica.gutschi@dowjones.com
(END) Dow Jones Newswires
03-02-08 1740ET
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