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Improved physical demand in 2013: Thomson Reuters Silver Market Review

The Thomson Reuters GFMS Interim Silver Market Review was released Tuesday at the Annual Silver Industry Dinner in New York.

The review cites improved physical demand for nearly all silver demand sectors this year. Here are the highlights:

  • The Review forecasts fabrication demand across all sectors (except photography) will grow in 2013, notably in jewellery (+6%) and silverware (+6%) as a reaction to price declines and an improving global economy.
  • Silver price decline driven by expectations that the Fed would taper its $85bn monthly bond and mortgage backed securities purchases in light of strengthening economic activity; similar to factors influencing the gold market.
  • Unlike gold, silver ETF holdings have continued to grow this year, reaching a record-high of 655 Moz as of October 31 while investment in silver coins is forecast to increase by 19% year-on-year.
  • Mine production poised to grow by 4% this year to 815 Moz, with production growth primarily coming from the US, Mexico and Dominican Republic.
  • The fundamental balance, the difference between supply (mine production and scrap) and demand (fabrication excluding coins) is set to extend its residual surplus for the eighth successive year.
  • Silver prices in the first ten months of the year have averaged $24.51, a 20.7% decline year-on-year.  GFMS now forecast a full year average price of $24.24 in 2013.

Read the full report here.