Silver Yearbook forecasts further drop in Silver prices, investor demand to stay robust

Gold  |  2013-05-17 10:39:53   |   By

New York based commodities research consultant firm CPMG forecasts Silver prices hitting further lows, but sees investor demand trending high.

NEW YORK (Scrap Monster) : New York based commodities research consultant firm CPMG  forecasts Silver prices hitting further lows, but sees investor demand trending high.

The ‘Silver Yearbook-2013’ forecasts that the investment demand for Silver will drop in 2013. According to data, 2012 saw a huge 32.1% surge in investment demand during 2012 compared to the previous year, mainly augmented by additions to ETP holdings and increased demand from China. CPMG forecasts that the investment demand in 2013 will fall by 14% from 122.5 million ounces in 2012 to 105.7 million ounces in 2013.

The research firm also expects Silver industry to face oversupply issues during the year. Mexico’s silver production is forecast to increase to 137.7 million ounces this year, while Chinese silver mine production is expected to rise 5% to 128.3 million in 2013. Canada’s silver mine production is forecast to increase to 18.2 million ounces this year. U.S. silver mine production is forecast to rise to 41.2 million ounces this year. In short, total silver supply is forecast to reach 982.6 million ounces this year, up one million ounces from last year.

On the other hand, the demand for silver jewelry is expected to fall. Demand from jewelry and silverware sector declined by 1.4% in 2012.The largest drop in demand was registered in India and the Europe.

The coin demand which dropped 18% last year has showed signs of rebound during this year. The U.S. Mint sales of American Eagle silver bullion coins has shot up by 40.3% during the first quarter.

 The prices are expected to settle lower throughout the year, which will boost investor demand in Silver.