Strong investor appetite for silver has pushed the price of the precious metal to the highest it’s been since 1980.
According to commodities market research firm CMP Group, 2007 was the second consecutive year investors were net buyers of silver, rather than net sellers.
The metal is attractive to investors because it acts as a hedge against global political, economic, and financial uncertainties.
Prices soared past 1980 figures this year, topping off at $20.785 US per ounce in March. Although CMP is predicting a dip in the second and third quarters, the company says net investor buying should keep prices strong this year, with further increases expected in the fourth quarter and early 2009.
According to CMP, investors are estimated to have purchased 60.8 million ounces in 2007, down from the 65.5 million ounces picked up in 2006. The company says it expects investors to buy a projected 74.9 million ounces in 2008.
In 2007, total silver supply rose 0.2 per cent to 784.8 million ounces. Mine production supplies gained 4.1 per cent from 2006 to come in at 533.7 million ounces, while secondary supply slipped 0.6 per cent to 243.1 million ounces in the same period.
CMP estimates fabrication demand in 2008 will increase 2.2 per cent to 740.2 million ounces.
