Robust Silver Investment Shows No Sign of Waning in '09-World Silver Survey


"Healthy investor interest in physical silver is expected to continue. . ."

The investor activity that was the main driver of high silver prices last year will continue to demonstrate strength this year, the Silver Institute's newly released World Silver Survey 2009 suggests.

In an interview with Mineweb, GFMS Chairman Philip Klapwijk and survey co-author, said the first four months of this year revealed very good silver investment flows. The survey advised, "Healthy investor interest in physical silver is expected to continue in the coming months, driven by continuing economic woes and uncertainty over the health of the financial services industry."

At the end of last year, the total value of silver held in ETFs came to $2.9 billion, according to GFMS' research.

Purchases of physical silver bullion bars and coins last year "soared to levels not seen in decades," GFMS' research revealed. "2008 was a stellar year for Indian silver imports," GFMS said, noting a 103% increase to an all-time record of 162.3 million ounces of silver.

"Perhaps surprisingly, in spite of silver prices rising by 12% in 2009, silver jewelry and silverware demand fell only a fraction. The modest scale of losses in both cases, owed much to healthy gains in India."

Meanwhile, industrial demand for silver fell for the first time in seven years, declining 1.4% to 447.2 million ounces with most losses occurring in the fourth quarter in 2008.

GFMS forecasts silver mine production is expected to "fall slightly in 2009, with output forecast to decline from all by-product sectors except gold."

"Declines are expected across most regions, with the exception of Latin America, where growth is forecast to continue," the survey advised. Growth is also expected to increase in Russia.

In their research, GFMS estimated that net supply from above-ground silver stocks fell 14% to 151.7 million ounces in 2008, primarily due to lower net government sales and a modest drop in scrap supply.

In their research, GFMS said it is likely that investment demand and silver prices will be robust, particularly at the relatively low level, around the $11/oz mark at which silver kicked off this year.

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe