This morning, May 30, the opening price of silver was just over US$13.00/oz. While not the US$14.50 level of late February, either price represents a significant increase over the US$11.55/oz average in 2006, which was itself a 58% gain over the previous year. The 2006 price was the highest average since the metal topped US$20.00/oz in 1980, according to figures available from THE SILVER INSTITUTE of Washington, D.C.
The institute has released its World Silver Survey 2007, a comprehensive look at all things silver during last year. The report is co-authored by GFMS LIMITED.
Total world silver supply was 911.8 million oz in 2006, down 1.5% from 2005. The drop was due to slightly less mine production and government sales coupled with the elimination of hedging by producers.
The Silver Insitute lines up demand figures to match supply, citing a 6% rise in industrial applications and a drops in photographic uses (10%), jewellery (5%) and silverware (11%). Total demand for silver used in fabrication was 840.5 million oz, down only 1% thanks to the stronger industrial applications sector. The balance between fabrication and total demand was covered by dehedging and implied net investment value.
Taken together, the supply-demand picture was enough to push up the price. Judging from the rising price thus far in 2007, observers expect a continuing tight supply situation.
North Americans can order a copy of the report for US$195 from the Silver Institute at www.SilverInstitute.org. Readers outside North America should contact GFMS at www.GFMS.co.uk.