Sharp Rise in Investment Demand Ignites Rally in Silver Prices
NEW YORK, NY -- (Marketwire) -- 01/24/13 -- Silver's recent rally can be attributed to a strong surge in investment demand. Last week, the iShares Silver Trust ETF (SLV) reported holdings increased by 572-metric tons, the largest increase in five years, to 10,735 tons. Five Star Equities examines the outlook for companies in the Silver Industry and provides equity research on the iShares Silver Trust ETF (NYSE Arca: SLV) and Silver Standard Resources Inc. (NASDAQ: SSRI)(TSX: SSO).
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Data collected from Bloomberg and Barclays show that investment through silver-backed exchange-traded products is at a record of 19,114 tons globally, which is approximately nine months of mine output. Additionally, the U.S. mint has reported that they have temporarily sold out of 2013 American Eagle Silver coins. So far in January silver sales have totaled 6,007,000 troy ounces, more than double 2012's average monthly sales of 2,811,875, according to data from the Mint.
"Some investors see poor man's gold as a cheaper alternative to the yellow metal and are allocating to it," said Mark O'Byrne, executive director of GoldCore Ltd. "Allocations to silver remain very small which suggests that the holdings could go higher resulting in higher silver prices again in 2013."
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The iShares Silver Trust ETF (SLV) holds silver bullion and is designed to provide investors with a simple and cost-effective method to gain exposure to the price of silver. Since the end of 2008 silver prices have nearly tripled are up approximately 3 percent so far in 2013. The iShares Silver Trust ETF has gained 6.5 percent year-to-date.
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. The company produced 8.6 million ounces of silver in 2012, which exceeded the high-end of their guidance range.
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