Silver - News Article

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    From UK paper 'The Independent' 02 June 2002.
    Cheers Janart.

    Market mover: Silver
    Source: Independent - London
    Publication date: 2002-06-02

    Gold may have been grabbing the market headlines in recent weeks, but silver has made equally striking advances.
    After steep falls in January this year, the precious metal has remained highly volatile, but the past fortnight has seen silver leap from strength to strength. On Friday, the spot price in London climbed through the important psychological barrier of $5/oz, to close at a two-year high.

    On the same day the gold price continued its seemingly relentless ascent, rising to a London close of $327/oz, a 31-month high. While the simple explanation was that silver prices have often tracked those of gold, analysts believe the latest rises are due to other factors.

    Silver's bull run began two weeks ago after the predictions of a leading metals research company, CPM, that global industrial demand would rise 3.7 per cent this year. The rally began in the futures market, where silver futures have soared 21 per cent since an eight- year low in November. CPM's predictions were based on the gradual recovery of the electronics and telecoms equipment markets, both large silver consumers.

    There is a global mismatch of silver supply and demand. Industrial use outstrips combined mine production, recycling and government sales by 16 per cent. The solution has historically rested in the hands of private investors, who hold around 400 million ounces.

    Also at work on the silver markets were growing concerns over the dollar, which has tumbled hard against the euro and the yen. Commodity buyers are now finding that they can build large stocks of dollar-denominated metals at relatively cheaper prices.

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