Mumbai, May 26
A BOOM in investor activity, mainly driven by funds operating on futures exchanges and considerable buy side interest from high net-worth individuals resulted in a dramatic rise of 36 per cent in silver prices in 2004 culminating in an average $6.66 per ounce. Prices reached a 17-year high last year.
The price performance reflects fundamental changes in silver's supply-demand balance, World Silver Survey 2005, released by Silver Institute and GFMS Ltd, said. A fall in net government sales and higher industrial fabrication too contributed to the price surge.
Through the first four-and-a-half months of 2005, silver price is averaging $7/oz as a result of decline in scrap supply and decrease in government bullion sales.
Mine production in 2004 registered a four per cent (720 tonnes) rise to reach 19,731 tonnes with the world's four largest producers Mexico, Peru, Australia and China providing the bulk of the increase.
On the demand side, while total fabrication in 2004 fell by 2 per cent to a six-year low of 26,023 tonnes, industrial off-take rose by 5 per cent to11,419 tonnes with electronics spearheading the gains. Coin and medal off-take too gained 15 per cent to a 10-year high of 1,277 tonnes, the report pointed out.