Investor Demand to Buoy 2011 Silver Prices
Source: Mineweb, Geoff Candy (11/23/10)
"Prices should continue to rise."
Speaking to Mineweb.com's Metals Weekly podcast a few days after the annual Silver Institute dinner in New York, where he predicted that silver prices could trade higher than $30/oz next year, GFMS Executive Chairman, Philip Klapwijk said he expects a continued wave of domestic demand for the metal coming to the market in 2011.
"If we look at calendar 2010 there has been a significant lift in investment in silver - it's possible that silver investment this year on a net basis may reach close to US$4billion in size and it's probable that next year we will see a higher figure and a larger scale of investment from both institutional and private investment sources."
Klapwijk said much demand is still coming from Western markets in the form of ETFS, futures market investments and quite a substantial amount of over-the-counter market investment.
He also says there has also been an uptick in silver investment demand in India and China for silver bullion products.
However, while Klapwijk is positive on silver's prospects next year he does say that over the longer term the supply situation could prove problematic.
In contrast to the gold market, he says, where production peaked in 2001, despite consistently higher prices, silver production has grown by almost 130m ounces from 2001 to 2010 and the prospect is for further increases.