The silver price is likely to reach US$40 an ounce this year, according to Philip Klapwijk, the global head of metals analytics for Thomson Reuters GFMS.
Speaking after the release of the consultancy’s World Silver Survey 2012, Klapwijk said silver had “more upside than gold” and therefore “there will be higher prices this year”.
Klapwijk’s predictions follow the rapid rise in silver prices in 2011 when, according to the Silver Survey, strong silver investment paved the way to “a record annual average silver price in a year marked by steep price volatility”.
“Silver posted an annual average price of US$35.12 last year, more than double the US$14.67 annual average price achieved in 2009,” the Survey reported.
“Physical silver bar investment grew by a massive 67 percent in 2011 to 95.7 Moz, while global coins and medals fabrication rose by almost 19 percent to an all-time high of 118.2 Moz.
“Western Europe and the USs, which bested 2010’s record performance in terms of American Silver Eagle bullion coin sales, led this category to its record high. Elsewhere, strong demand in China accounted for a near 60 percent rise in its bullion coin output last year.
“Total silver fabrication demand stood at 876.6 Moz in 2011, down 1.5 percent but still reaching its second highest level since 2000.”
The Survey also reported that jewellery demand slipped from 167.4 Moz to 159.8 Moz due to “volatile prices and a weak global economic backdrop”.