Silver prices soar while demand slips
By Tom Stundza -- Purchasing, 12/6/2006 9:05:00 AM
Silver prices have risen 34% over the last two months, reaching a new six-month daily trading high around $14/ounce on Tuesday. Reason: Investors have rediscovered the precious metal partly because of sharp declines in the value of the dollar against major currencies. Silver has averaged $11.43/oz through November.
Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo, forecasts a rise in silver’s average to $15 this month because of speculative investment. Precious metals consultant GFMS of London believes that strong investor buying of silver, fueled by a popular exchange-traded fund (ETF), is likely to take the price to a new plateau of $15 in the next few months. And all this price inflation comes despite 3% slippage in demand for fabrication to 28 million ounces. Industrial demand was strong over the first half but has slowed in recent months.
GFMS is forecasting that demand will fall in 2007 under the impact of much slower growth in global industrial production and a less strong year for the electronics industry. Photographic use of silver is dropping by 11% this year and will fall again in 2007 as demand continues to be affected by the switch to digital technology.
Also, the high silver price has prompted some economization in use in photographic film.
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not.v cut 500oz per ton. thats on the tsx venture exchange
courtney lisa wall - 12/7/2006 10:21:00 AM EST
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