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Investor demand drives Silver last year

# Silver  # gold prices  # gold  # Silver Institute  

Robust global silver investor demand was the dominant driver of silver prices last year, accounting for almost a quarter of total silver demand.

NEW YORK(BullionStreet): Investors remained significant net buyers of silver in 2012, as evidenced by the 21 percent increase in implied net silver investment, according to “World Silver Survey 2013,” by the Silver Institute.

That figure represents approximately $8 billion on a net basis, substantially above the annual average of $1.2 billion over the 2001-10 time frame.

Investment includes physical bar investment, exchange traded funds and fund activity on Comex) to set an all-time high of 160.0 Moz. By comparison, in 2004, the level of implied net silver investment was 5.4 Moz.

Robust global silver investor demand was the dominant driver of silver prices last year, accounting for almost a quarter of total silver demand.

Averaging $31.15 per ounce, 2012’s price level was the second highest on record, behind the average reached in 2011. While last year was a volatile year for most precious metals, globally, silver investment rose to a total of 252.7 million troy ounces.

Global silver ETF demand was robust, up by 55.1 Moz last year, hitting a historic high of 631.4 Moz. Total ETF holdings rose to a record $18.9 billion at year-end, up 16 percent from the figure recorded at year-end 2011.

Buoyant investor interest was also seen in demand for coins & medals at 92.7 Moz in 2012, the third highest level ever recorded. Coin minting in China posted a strong increase, realizing a 47 percent gain over 2011.

Total silver fabrication demand in 2012 dipped to 846.8 Moz, reflecting losses in key areas. Industrial silver fabrication slipped by 4 percent to 465.9 Moz, the result of the challenging economic environment seen in many industrialized countries.

However, India recorded a 4 percent gain while China experienced a small increase in industrial demand.

Worldwide jewelry fabrication at 185.6 Moz remained effectively unchanged from 2011, thereby proving far more resilient than gold with its 4% decline.

Growing consumption in India and China for silver jewelry offset softer western markets. Photographic demand for silver fell to 57.8 Moz, while the silverware sector slipped to 44.9 Moz due to ongoing structural factors and economic weakness.

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