Wednesday, May 2nd 03:22 PM IST

Silver rally to hit $50 later this year

# Silver prices  # silver rally  # SHFE  # silver futures  

NEW DELHI(BullionStreet): After being the top performer in Q1 2012 out of all other commodities; including gold, Silver might hit $40 an ounce soon and $50 an ounce by the year end,analysts said.

Silver grew by an annual rate of 2.2% in the first quarter this year.

Analysts said silver is currently reacting much of the same way that physical commodities do and could hit $40 an ounce in a short time and may surpass $50 an ounce in the third or fourth quarter.

Short supply of the metal with minable silver being pushed to the limit, the only place for silver to go is up and up, they added.

The white metal received a boost last month after largest consumer China started Future trading on the Shanghai Futures Exchange which brings a new group of traders to silver.

Analysts said Asian investors get a direct way to trade silver futures and will impact on silver's overall price point as the market will be bigger and more liquid with the advent of these futures contracts.

With the Chinese Futures, the U.S. exchanges and sentiments will no longer dominate futures trading in the silver market.

They added that China is likely to allow investors wider access to the silver market and that will pump more money into the commodity.

In addition, it will make it more difficult for American speculators to manipulate the markets in their own favor.

China's supply of mined silver is expected to be insufficient to meet swelling development and growth demands in the coming quarters, something that will increase imports, and push silver further north,analysts added.

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