Silver prices on COMEX have recently hit $ 15.54 per ounce on 3rd January 2007. The medium term outlook of the commodity looks quite positive. Rise in demand of Gold and industrial metals will facilitate Silver in its bull run. Open interest in the metal is higher than the normal and falling Dollar will be supporting the rise in the days to come.
Silver has been a usual outperformer in the commodities arena, the metal has so far gained 9% in its brief span of 15 days but don’t go anywhere the rally is highly likely to continue and the petite corrections in the prices will make Silver a strong contender for auxiliary rally in the days to come. The uncanny flair of Silver has been outshined by traders beloved Gold by and large, but this white precious metal has performed on numerous occasions. Participants should not slam their eyes, as the rally is not over yet.
The GFMS survey on Silver was released on November 2007. According to the analysis Silver prices from the period of January-October 2007 improved by 17.1% on a year on year basis. The survey reveals some fascinating facts, Correlation against copper has increased and in Q3 2007 was stronger then Gold. Implication that silver is increasingly being traded as just another industrial metal. Gold and Copper are considered as the two companions of Silver. Over the years, prominent demand of silver has emerged from Industry applications. Silver is also frequently used in Industrial applications, Photographic films, Jewellery and decorative uses.
Demand:
Industrial metals, share the largest pie of World Silver Demand, the demand for the year 2007 as per the forecasts were 51% which gained from the preceding year when it was 47%. On the other hand Jewellery demand remained unaltered at 25%. Demand for Investments is forecasted at 5% as against 7% an indicator that the investors might have got lured towards Yellow metal. However the outlook for the investments is positive in the days to come. Photographic demand continues to fall rapidly due to impact of digital technology. Demand for Photography declined to 15% as against 16% in the year 2006.
The sea change in the demand fabrication of Silver is expected from Industrial sector from where it is forecasted to increase by 25 million tones. Industrial fabrication of Silver is expected at around 450 million ounces. The survey indicated that Industrial demand is on the rise in 2007 and should account for well over 50% of all fabrication.
Supply:
World silver mine production amplified by4% in 2007 the key drivers for growth were higher silver output from Chile’s La Coipa mine, first output from San Cristobal mine in Bolivia, and higher production in Mexico. However the counterbalance is expected by declines in Canada, Peru and Russia. The Silver institute expects a stronger 7% rise expected in 2008.
Domestic Scenario
Prices of Silver from a period of August till date have surged by 9%, the contract also saw a high of Rs 20144 on 3rd January 2008. From hereon the moves of Silver look very optimistic technically. Even if the commodity dips from its current levels it would be a very good avenue to invest. The March expiry contract over a period of 6 months have formed a strong support at 19000-18400 levels. Corrections to these levels will only benefit the market participants in days to come.
The other factor playing on precious metals space is the Dollar movements, Dollar in contrast to domestic currency “Rupee” has moved down by 2.38%, this has by and large helped the siphoning of liquidity in favor of Silver.
China has also announced recently that it will slash the import duties on Copper taking into account the rising demand from its hungry economy. China removed a 2% tariff on all refined copper imports from Jan. 1 after applying the duty-free policy to metal from Chile, the top supplier, in October 2006. This will enthuse more support for Base metals to come and circuitously to Silver.
Outlook:
Investment demand for silver has rebounded after the weaknesses at the start of 2007. Silver has responded to gold’s earlier reaction to the financial markets crisis and slide in the US dollar. Overall, Silver stocks will increase again in near term. The demand outlook seems continuing for Silver in the medium term, The sector driving the growth of demand for Silver will be industrial metals, with china reducing its import duties.
Silver in domestic futures market can touch Rs 21300 on upper levels and even more unchartered territories.
Silver has been a usual outperformer in the commodities arena, the metal has so far gained 9% in its brief span of 15 days but don’t go anywhere the rally is highly likely to continue and the petite corrections in the prices will make Silver a strong contender for auxiliary rally in the days to come. The uncanny flair of Silver has been outshined by traders beloved Gold by and large, but this white precious metal has performed on numerous occasions. Participants should not slam their eyes, as the rally is not over yet.
The GFMS survey on Silver was released on November 2007. According to the analysis Silver prices from the period of January-October 2007 improved by 17.1% on a year on year basis. The survey reveals some fascinating facts, Correlation against copper has increased and in Q3 2007 was stronger then Gold. Implication that silver is increasingly being traded as just another industrial metal. Gold and Copper are considered as the two companions of Silver. Over the years, prominent demand of silver has emerged from Industry applications. Silver is also frequently used in Industrial applications, Photographic films, Jewellery and decorative uses.
Demand:
Industrial metals, share the largest pie of World Silver Demand, the demand for the year 2007 as per the forecasts were 51% which gained from the preceding year when it was 47%. On the other hand Jewellery demand remained unaltered at 25%. Demand for Investments is forecasted at 5% as against 7% an indicator that the investors might have got lured towards Yellow metal. However the outlook for the investments is positive in the days to come. Photographic demand continues to fall rapidly due to impact of digital technology. Demand for Photography declined to 15% as against 16% in the year 2006.
The sea change in the demand fabrication of Silver is expected from Industrial sector from where it is forecasted to increase by 25 million tones. Industrial fabrication of Silver is expected at around 450 million ounces. The survey indicated that Industrial demand is on the rise in 2007 and should account for well over 50% of all fabrication.
Supply:
World silver mine production amplified by4% in 2007 the key drivers for growth were higher silver output from Chile’s La Coipa mine, first output from San Cristobal mine in Bolivia, and higher production in Mexico. However the counterbalance is expected by declines in Canada, Peru and Russia. The Silver institute expects a stronger 7% rise expected in 2008.
Domestic Scenario
Prices of Silver from a period of August till date have surged by 9%, the contract also saw a high of Rs 20144 on 3rd January 2008. From hereon the moves of Silver look very optimistic technically. Even if the commodity dips from its current levels it would be a very good avenue to invest. The March expiry contract over a period of 6 months have formed a strong support at 19000-18400 levels. Corrections to these levels will only benefit the market participants in days to come.
The other factor playing on precious metals space is the Dollar movements, Dollar in contrast to domestic currency “Rupee” has moved down by 2.38%, this has by and large helped the siphoning of liquidity in favor of Silver.
China has also announced recently that it will slash the import duties on Copper taking into account the rising demand from its hungry economy. China removed a 2% tariff on all refined copper imports from Jan. 1 after applying the duty-free policy to metal from Chile, the top supplier, in October 2006. This will enthuse more support for Base metals to come and circuitously to Silver.
Outlook:
Investment demand for silver has rebounded after the weaknesses at the start of 2007. Silver has responded to gold’s earlier reaction to the financial markets crisis and slide in the US dollar. Overall, Silver stocks will increase again in near term. The demand outlook seems continuing for Silver in the medium term, The sector driving the growth of demand for Silver will be industrial metals, with china reducing its import duties.
Silver in domestic futures market can touch Rs 21300 on upper levels and even more unchartered territories.
