With gold prices under pressure in recent months analysts see silver outperforming gold this year. On 12 March 2013, Resource Investing News reported Eric Sprott of Toronto-based asset manager Sprott Asset Management as expecting the current level of silver demand to have an impact on the market.
**“The Investment of This Decade”**
Referring to the 2011 and 2012 sales of the US Mint, Sprott noted that silver and gold coins had received the same amount of investment, meaning that investors have been purchasing 53 percent more silver than gold. “I think silver will be the investment of this decade, whereas gold was the investment of last decade,” Sprott commented, as quoted by Resource Investing News. He added that his own company had raised $320 million (£214 million) in the final tranche when it issued its silver trust, compared to $349 million raised for gold a few months earlier.
In addition, silver is reported as attracting more attention in India and China, with the Wall Street Journal observing a notable shift in focus from gold to silver among Indian investors on account of silver’s undervaluation. China in turn has in recent years become the world’s leading market for both physical investment and paper trading of silver futures and other similar products, as reported by the Silver Institute in December 2012.
**Factors Supporting Silver**
Among the main factors supporting sliver is the positive outlook on the world’s economy which benefits metals with industrial applications such as silver and platinum and dampens demand for safe-haven assets such as gold.
Resource Investing News also quoted Haywood Cheung Tak-hay, president of the Chinese Gold & Silver Exchange Society, as saying that silver prices were likely to find support in expectations that large amounts of silver will be used in the production of mobile phones and other electronic devices by countries such as China, Japan and South Korea. “Silver is now trading at a much lower level than its normal difference from gold. As such, we can predict silver will rise further this year,” he added.
The mining news website Mineweb recently reported the view of Thomson Reuters GFMS’s William Tankard who said that silver investment “has had a fantastic run” over the past few years and the outlook for 2013 was “reasonably positive”. Tankard was quoted as pointing out that the reason for that was the overriding positive sentiment towards precious metals against a backdrop of balance sheet expansions in advanced economies, currency debasement as well as the overall prevalence of record-low interest rates.
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**Silver Price Outlook**
Resource Investing News quoted Ian Williams, mixed asset fund manager at Charteris Treasury, as forecasting a sustained bull market for silver with prices reaching $165 an ounce by October 2015. Mineweb reported that Thompson Reuters GFMS’s Tankard expected silver to average around $36 per ounce in 2013, before moderating slightly to around $32 per ounce in 2014.
On March 13, Bloomberg reported that silver futures for May delivery rose 1.1 percent to trade at $29.16 an ounce, heading for their biggest advance since February 25.