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November 11th, 2011
A new Thomson Reuters-GFMS report, commissioned by The Silver Institute, forecasts silver investment will achieve yet another historically high total this year in spite of a significant level of position unwinding by institutional investors.
In the report, “The Silver Investment Market-An Update, November 2011″, Thomson Reuters-GFMS says the outlook for silver prices remains bullish, “with the potential of prices nearing, if not exceeding, the $40/oz, a realistic prospect as the fourth quarter develops.”
“However, should silver exceed $40,” the report cautioned, “some unwinding may occur, principally of institutional positions, given their focus on upside potential. This raises the possibility of some deleveraging in the future markets.”
However, the study noted, “this should have little impact on silver’s safe haven qualities, with the potential for retail and HNW [high-net-worth] investors to raise their asset allocation (in favor of both silver and gold.”
This situation “argues well for bullion coin and small bar demand, not only in western markets, but also in India and China.” Indian physical investment demand could comfortably exceed 45 million ounces this year, up from 29 million ounces last year.
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October 20th, 2011
Silver, the best-performing and most-volatile precious metal of the past year, may rebound from a bear market as investors bet on growth in developing nations and an extended European debt crisis.
Silver futures may average $38 an ounce this quarter and rise to a record $42 by the final three months of 2012, compared with $30.155 at 5:10 p.m. in London today, according to the median in a Bloomberg survey of 11 analysts. The gains will mean record profit for producers Pan American Silver Corp. (PAA) and Fresnillo Plc (FRES), analyst estimates compiled by Bloomberg show.
China, the biggest emerging-market user, is expanding at more than five times the speed of the U.S., driving consumption of the precious metal most used in industry. Demand is also coming from investors looking for an alternative to cash and gold, which costs about 50 times more than silver. The 30-week correlation coefficient between the two metals is now at 0.82, from as low as 0.47 in 2005, data compiled by Bloomberg show, with a figure of 1 meaning the two move in lockstep.
“Prices now look relatively cheap to where they have been recently,” said David Wilson, an analyst at Societe Generale SA in London and the most accurate silver forecaster tracked by Bloomberg in the two years through June. “The backdrop is still very supportive for gold and we think that silver will leverage off the back of that. Emerging markets are going to be important for demand for sure.”
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September 2nd, 2011
Silver futures and Gold gained in New York as concern about slowing growth drove equities lower and boosted demand for the metal as an alternative investment.
European equities fell before a report that may show the U.S. economy, the world’s largest, added fewer jobs last month as the unemployment rate held above 9 percent. Advanced economies will probably return to recession as governments toughen austerity measures, said Nouriel Roubini, who predicted a bubble in U.S. house prices before the market peaked in 2006.
“Bullion is still well supported, as investors are afraid to liquidate their longs amid ongoing policy uncertainty in both the U.S. and Europe,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. “All eyes are on the jobs report in the U.S. today.”
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August 30th, 2011
Silver futures and gold rose in New York on speculation that the Federal Reserve will ease monetary policy further to stimulate the economy, boosting the appeal of the precious metal as an alternative asset.
“We need to do more,” Chicago Fed President Charles Evans said today in a CNBC interview. The Standard & Poor’s 500 Index fell after a report showed confidence among U.S. consumers plunged in August to the lowest in almost two years. Gold has rallied 12 percent this month, touching a record $1,917.90 an ounce on Aug. 23.
“Classic flight-to-safety instruments are getting a bid today,” Adam Klopfenstein, a senior market strategist at MF Global in Chicago, said today in a telephone interview. “The inverse correlation between equities and gold will persist. Liquidity measures put the inflationary card in the picture. It’s the perfect storm to be long gold.”
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August 26th, 2011
Silver futures and gold rose in New York for a second straight day after Federal Reserve Chairman Ben S. Bernanke offered no plan to provide further stimulus for the economy.
While Bernanke said the central bank has the tools to spur growth, he refrained from outlining a plan for a third round of so-called quantitative easing. The Fed pledged on Aug. 9 to keep the benchmark interest rate between zero percent and 0.25 percent through at least 2013 to help stimulate the economy. The next policy meeting is Sept. 20. Gold futures slumped as much as 11 percent in the three days through yesterday, after touching a record $1,917.90 an ounce on Aug. 23.
“The gold camp wanted to hear more about easing and more stimulus, but we just got put on hold until September,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “All the problems that drove the price of gold up are still out there. All Bernanke did today was move the decision to a proper time.”
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August 19th, 2011
Silver isn’t gold, but it’s the next best thing, even if it is more volatile, metal watchers say.
And being No. 2 isn’t so bad when investors are rushing to safe-haven precious metals to preserve their capital in a shaky global economic and currency climate.
“Silver has attached itself to gold and both are becoming kind of alternate world currencies,” said Tony Ebersole, spokesman for Idaho-based silver miner Coeur D’Alene (CDE) .
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