U.S. demand for silver as an investment vehicle is expected to pick
up in 2018 as investors move more funds into precious metals instead
of the stock market, according to the latest report from The Silver Institute.
“Coin demand almost halved to 73 million ounces in 2017,” according
to the Institute. “Much of the weakness was concentrated in the United
States where the rising stock market diverted some capital away from
physical precious metals. Investment is forecast to flow back into
precious metals, benefiting silver bar and coin demand this year.”
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Silver demand from industrial applications, comprising
approximately 60 percent of total silver demand in 2017, is expected
to climb higher and take a large portion of overall demand for the metal.
Jewelry demand is forecast to climb 4 percent over 2017 levels.
Silver demand from the jewelry sector accounts for approximately 20
percent of overall silver demand.
Silver exchange-traded-products (ETP) are estimated to increase
about 3 percent in 2018 after reaching a record high of 670 million
ounces in 2017, according to the institute.
Global mine supply slipped 1 percent in 2016, the first annual
decline following 14 years of consecutive growth. In 2017 that trend
continued with mine output expected to contract by a further 2 percent
to 870 million ounces.
“Production disruptions out of South America, along with a decline
in capital expenditure among the primary producers in the past five
years, is expected to constrain output again this year,” according to
the Silver Institute. “However, the strong recovery in base metal
prices will provide some support to output in 2018, particularly from
by-product producers capitalizing on the trend.”
The spot price of silver average $17.05 per troy ounce in 2017, but
is anticipated to experience volatility in 2018.
“On a ratio with gold, currently at around 72, silver has plenty of
room for improvement and to migrate towards its long-term average of
around 64,” according to organization.
The Silver Institute describes itself as “a nonprofit international
association” of “leading silver mining houses, refiners, bullion
suppliers, manufacturers of silver products and wholesalers of silver
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