Silver Looks Gloomy In The Medium Term- CPM According to a report released by New York-based commodities research consultants CPM Group on Thursday, the declining trend in silver prices is expected to continue in the medium term. Silver rose at a compounded annual average rate of 23.2% between 2002 and 2011, according to CPM, after which prices went into decline. In 2012, prices fell 11.7% to average US$31.17/oz. In the first nine months of this year, silver has averaged 20% less than in the same period in 2012, the company said in a release. The average silver price so far this year is US$24.53/oz. Investors have backed away from the silver market significantly so far this year, CPM said. Investment demand for the metal is expected to decline by almost half relative to the 170.3Moz accumulated by investors in 2012. When silver failed to return to the highs set in 2011, investors began to sell off. Although investment demand is expected to remain positive over the next ten years, declining demand is expected to weigh heavily on prices in the medium term, the company said. In the long term, silver prices could begin to rise within the next 10 years to touch new record nominal highs in the latter half of the 10-year projection period, CPM said. The price rise will be spurred by renewed investor interest and stronger industrial demand in comparison to the first half of the projection period. Growth in mine supply is expected to slow down over the next five years as projects are delayed due to lack of financing. The weakness in supply growth expected over the medium term will help support prices amid declining investor interest in the market, CPM said. Investors will return to the market backed by expectations for strong capital appreciation amid rising industrial demand for the metal, the report predicts. In this scenario, silver prices could rise rapidly, possibly touching fresh record highs within the next ten years. In May, CPM forecast weaker silver prices this year, mainly due to reduced investor interest, and said that prices could decline to US$24/oz. Silver closed Thursday at US$21.72/oz on the London Bullion Market. The highest monthly average this year was in January at US$31.11/oz, while the lowest was in July when silver averaged US$19.71/oz. Powered by Commodity Insights
Posted on: Fri, 18 Oct 2013 03:59:36 +0000
Trending Topics
© 2015