Silver to average lower price in 2013, demand for silver coins still strong: report

The Silver Institute released a report Wednesday that indicated silver prices will end the year lower than 2012’s average of $31.15 per ounce. Although prices have suffered a tremendous decline, global demand remains strong and investment rose to 252.7 million troy ounces last year.

Silver coins have experienced high sales, despite the price drop. Silver American Eagles are up 40 percent and it will stay at the level for the remainder of April. If the trend continues then silver sales will the end year on record-highs. This month, silver has fallen all the way to $23, down from $32.50 in January.

Last year’s $31.15 average level was the second highest on record, right behind the year prior. The high investment demand represents about $8 billion in a net basis, which is considerably higher than the $1.2 billion during the 2001 to 2010 period, according to the survey.

Investors showed their dedication to silver as there was a 21 percent increase in implied silver investment, including in physical bar acquisitions, Comex fund activity and exchange traded funds (ETFs).

“The fact that we have global growth accelerating into next year means we should get a relatively strong response from industrial demand,” said Neil Meader, head of precious metals research and forecasts at Thomson Reuters GFMS. “We see a lot of bargain hunting coming through in the wake of the recent price drop, so it’s quite likely that we would see decent (silver coin) recovery in the calendar year 2013 in comparison to 2012.”

The Daily Gold published a report last week that found silver is following a pattern from the 1970s. The group stated that the cyclical bear market is serving its purpose and is “correcting the six-fold advance.” Charts published by the organization show a similarity between silver’s performance since 2008 and silver’s trading from 1971 to 1980.

At the time of this writing, silver is trading at $23.14, up 32 cents, or 1.42 percent. Gold is also up $18.80, or 1.33 percent, at $1,427.60.

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