Silver Price Will Rise This Year, Survey Forecasts

It’s not only the price of gold that may keep rising this year.

The silver price will rise in 2012 and likely top $40 an ounce, said Philip Klapwijk, global head of metals analytics for Thomson Reuters GFMS, in an audiocast following the release of the group’s World Silver Survey 2012.

At press time, the metal was trading at $31.90 an ounce.

“Silver has rather more upside than gold,” Klapwijk said. “There will be higher prices this year.”

He also predicted silver will continue to be “more volatile” than gold, with silver showing some weakness in the second quarter of the year.

Regarding the prior year, the survey noted that silver posted an annual average price of $35.12 in 2011, more than double the annual average price achieved in 2009 ($14.67).

“Silver did really spectacularly last year,” said Klapwijk, citing strong investment demand and increased interest for China.

He noted that there was a small drop in global silver jewelry demand in the last year, in spite of some favorable trends.

Silver has “tended to win market share for karat gold jewelry,” he said. “[But] you are to some extent seeing migration at the low end of the market from silver jewelry to steel and other low-end alternatives.”

One bright spot was “branded silver jewelry,” he said.

He also predicted that the U.S. recovery “should favor sterling silver jewelry.”

The survey was researched and compiled by GFMS for the World Silver Institute.