Silver Prices Hit 19-Month Low -- Industrial and Investment Demand for the Precious Metal Slowing
NEW YORK, NY -- (Marketwire) -- 06/27/12 -- Silver stocks have struggled in 2012 amidst growing concerns of a global economic slowdown. Around 50 percent of silver's demand comes from industrial uses, which has suffered significantly from the euro-zone crisis. The Global X Silver Miners (SIL) has fallen over 18 percent in the last three months, while the iShares Silver Trust ETF (SLV) has fallen over 14 percent over the same period. The Paragon Report examines investing opportunities in the Silver Industry and provides equity research on Endeavour Silver Corp. (NYSE: EXK) (TSX: EDR) and Silver Standard Resources Inc. (NASDAQ: SSRI) (TSX: SSO).
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Silver prices last Friday hit a new 19-month low as both industrial and investment demand for the precious metal has slowed. Silver for July delivery settled at $26.661 per troy ounce Friday, the lowest since November of 2010. The recent decision by the Federal Reserve to not pursue aggressive stimulus measures has reduced investment demand for safe havens, gold and silver. "In light of silver industrial demand slowing down and investment demand failing to plug the gap, it is the precious metal most vulnerable on the downside," Barclays' Suki Cooper said in a note.
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Endeavour Silver has two producing silver mines in Mexico, the Guanacevi Mines operation in Durango State and the Bolañitos Mines operation in Guanajuato State. In 2011 these mines produced 3.7 million ounces of silver and 21,800 ounces of gold. Production is forecasted to rise in 2012 to 4.3 million ounces of silver and 26,800 ounces of gold.
Silver Standard has the largest in-ground silver resource of any publicly-traded primary silver company, with a pipeline of 15 projects ranging from grassroots exploration to production in Argentina, Peru, Mexico, Canada, Chile, and the United States. During the first quarter of 2012 the company entered into two long-term silver concentrate sales contracts with smelters for 60 percent of monthly production commencing April 2012.
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