January 5, 2013

GFMS: Silver Prices to Climb 38% in 2013

The world's most respected precious metals consultancy, Thompson Reuters GFMS, came out last month with its 2013 forecast for silver prices.

After being bearish on silver prices over the past few years, GFMS has come around and predicted a good year for silver investors in 2013, with gains as high as 38%.

Philip Klapwijk, global head of metals analytics for Thomson Reuters GFMS, said "a rebound in investment demand stemming from continuing loose monetary policies is expected to drive silver prices towards and possibly over $50 during 2013."

Klapwijk said buyer interest may not match that of 2011, but it will rise compared to 2012.

"We wouldn't be surprised also if silver's gains outpaced gold's, not only as the usual result of lower liquidity but also as memories of early 2011's painful losses (in silver) continue to fade," said Klapwijk.

Here's why silver could be the precious metals star of 2013.

Silver Prices in 2013

Overall, GFMS says, demand for silver in 2012 broke down as follows: 43% from industrial users, 30% from investment demand, 21% from the manufacture of jewelry and silverware, and the remainder from photography and producer de-hedging, or closing out positions that had been used as a hedge.

In 2013, GFMS sees industrial demand being a bigger factor of higher silver prices.

Another is, of course, investment demand. Through Nov. 23, holdings in silver exchange-traded funds totaled 623 million ounces. That's up 47 million ounces from the 2011 year-end figure.

Besides "the persistence of ultra-low interest rates" driving investment demand, Klapwijk also cites demand from emerging markets as a factor.

"In China, for example, jewelry demand is growing at a double digit rate," he said.

GFMS also expects further producer de-hedging - unwinding positions used as a hedge - next year. This continues the trend from 2012, when GFMS says producers de-hedged roughly 10 million ounces of silver. Klapwijk said "producers continue to deliver into outstanding positions faster than they are replaced."

Money Morning Global Resources Specialist Peter Krauth is even more bullish than GFMS.

Krauth said he's expecting silver prices - at $32.55 in New York today (Thursday) - to climb to $54 an ounce in 2013.

Among the reasons Krauth cited for higher silver prices include the re-election of U.S. President Barack Obama, the gold/silver ratio and demand from both investors and industry.

How to Cash in On Higher Silver Prices

Several ETFs give investors a chance to try to cash in on higher silver prices.

One of the best ETFs is the iShares Silver Trust (NYSE: SLV).

With some $5.5 billion in assets, SLV is the world's largest silver-backed ETF, using JPMorgan Chase & Co. (NYSE: JPM) in London as its custodian. SLV shares, which represent approximately 1.0 silver ounce each, are easy to buy and sell through your brokerage account.

Investors should also consider the Sprott Physical Silver Trust ETV (NYSE: PSLV). Sprott actually allows investors to redeem the units in the exchange for physical silver bullion. The physical bullion that backs the fund is held in Canada - away from the potentially grasping hands of Washington, but still in a market that protects property rights and that's easy for you to physically access.

My Blog List

  • 美銀美林:黃金處於牛市開端目前缺乏立刻上漲觸發因素 - 美銀美林(Bank of America Merrill Lynch)在周五(7月3日)的報告中表示,黃金可能處於牛市的開端,但目前缺乏價格立刻上漲的觸發因素,但該機構對鉑金的前景保持謹慎。 美銀美林在周度報告中表示,“我們正處於牛市的開端,但金價沒有立即上漲的催化劑。希臘局勢持續的不確定性是個關注點。風...
    1 hour ago
  • 25歲到35歲決定你一世能賺多少錢 - 今年二月,美國聯邦儲備銀行紐約分行發表了一份研究報告,分析美國40年以來超過四百萬人的職業生涯規劃,你一世能賺多少錢,早在25歲到35 歲就決定,該研究顯示,這十年來平均每個人的收入至少成長38%,但是一過了35歲,對大部份人來說,成長居然是零。 換句話說,如果沒有在進入職場的前十年,累積實力,霸好位置,一...
    1 day ago
  • 說佛法 - 清朝皇帝怎麼看喇嘛教? 天聪十三年(1636年),皇太极也告谕诸臣:“喇嘛等口作讹言,假以供佛持戒为名,潜肆淫邪,贪图财物悖逆造罪,又索取生人财帛牲畜,诡称使人免罪于幽冥,其诞妄为尤甚。喇嘛等不过身在世间,造作罪孽,欺讹无知之人耳。至于冥司,熟念彼之情面,遂免其罪孽乎?今之喇嘛,当称为妄人,不宜称为喇嘛。乃蒙古...
    2 days ago
  • IPIC's interests - It is interesting to see in the announcement that was made by IPIC on the London Stock Exchange. We know that IPIC is part of the Aabar group which owns a ...
    4 days ago
  • Updates on NWC stocks - It has been long time since I updated my portfolio position. As you notice, KLCI plunged from all time high all the way around 70 points loss now. With late...
    4 weeks ago