Report: Physical silver demand strong in 2013, sales could break 2011 record

On Tuesday, the Thomson Reuters GFMS Interim Silver Market Review was released during the annual Silver Industry Dinner in New York. The yearly report found that silver coins are becoming the top choice for investors and sales could hit a record high this year due to a drop in its price.

This year, demand for silver can be seen in nearly all sectors. “Physical demand [for silver coins] surged this year, and is expected to grow by 19 percent year on year,” the report stated, adding that sales could match levels in 2011.

Silver exchanged traded funds (ETFs) have grown steady throughout the year. The trend suggests that silver ETFs have risen while gold ETFs have fallen.

It noted that silver prices have dropped due in part to the Federal Reserve considering that it would taper its $85 billion per month quantitative easing initiative – in the end, the central bank postponed its decision and may actually boost its bond and mortgaged-backed securities purchases when Janet Yellen becomes Fed Chair early next year.

American Eagle silver coins are expected to exceed the 2011 record of nearly 40 million troy ounces. During the first 10 months of the year, silver coin sales equalled to 39.17 million ounces, according to various bullion estimates.

“Eagles are one of the most convenient ways to invest in silver bullion. They are much easier to sell, store and transport than large silver bars,” said Terry Hanlon, president of Dillon Gage, in an interview with the Wall Street Journal.

“American Eagle silver coin is the most popular product in our portfolio,” Zane Lim, regional manager at precious metals dealer Bullionstar.com, told the same news outlet. “For a new investor, silver is attractive and coins are easier to purchase with greater liquidity compared to bars.”

During the Thursday trading session, silver was trading on the positive side and is priced at nearly $21 per ounce.

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