GFMS Sees Silver-Fabrication Demand Advancing 3.9% This Year

Demand for silver fabrication climbed this year, paced by gains in coin and jewelry consumption, as prices tumbled into a bear market in April, Thomson Reuters GFMS said.

Fabrication demand will rise to 877 million ounces in 2013, up 3.9 percent from 844 million last year, the researcher said in a report published by the Washington-based Silver Institute. Use in jewelry will gain 5.6 percent, while consumption in coin and medal purchases is forecast to surge 19 percent to 110.5 million ounces

Silver prices tumbled 31 percent this year partly on concern that the Federal Reserve would reduce the pace of U.S. monetary stimulus. The slump attracted buyers of physical metal. The U.S. Mint sold a record 40.175 million ounces of American Eagle coins in 2013, topping the previous annual all-time high of 39.869 million in 2011, the mint said yesterday.

“One of the defining characteristics of the silver market is its display of duality, at times closely shadowing developments in the gold market and at others, taking cues more from the industrial world,” London-based GFMS said. “This trend is forecast to continue into 2014.”

Silver prices will trade from $20.20 an ounce to $23.70 through the end of the year, averaging $24.24 for 2013, GFMS said. Implied demand from the investment sector will drop to 143.8 million ounces from 162.60 million in 2012.

On the Comex in New York, silver futures for December delivery fell 2.4 percent to $20.778 an ounce yesterday.

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