De vooruitzichten voor zilver volgens HSBC......
Silver prices are expected to break through $30/oz by year end, but are unlikely to remain above $32/oz for a sustained period says HSBC.
Investment demand is expected to continue its role as the swing factor for silver prices over the course of the rest of 2012.
According to HSBC's latest Silver Outlook report, silver prices are expected to move back above $30/oz by year end and remain relatively firm throughout 2013 but, this will be in spite of an expected surplus of over ground silver stock as a result of moderately increased mine production and scrap silver on the supply side and only moderate growth in industrial and physical demand.
The bank writes that this surplus will have to be absorbed by net implied investment if prices are not to fall further.
"Based purely on underlying physical fundamentals, which are only moderately bullish in our view, we believe prices are unlikely to stay over USD32/oz for a sustained period."
The bank is of the opinion that, while industrial demand could have an impact on prices, "Investor sentiment will be a key determinant of silver prices going forward, especially in the short term."
It writes, "Investor demand has absorbed the excess physical silver generated by rising mine output and slack jewelry and photographic demand. The silver ETFs specifically have absorbed sizable amounts of bullion in just a few years."
According to its estimates, HSBC says silver ETFs will hold the equivalent of almost two-thirds of annual silver mine output this year and more than twice annual jewelry and silverware demand this year.
What is driving investor demand?
According to HSBC, many of the factors affecting silver demand, are the same as those affecting gold demand.
"Silver is traditionally responsive to changes in monetary policy," it writes, adding, "The possibility that the US Federal Reserve and other central banks will further ease policy later this year is silver price-supportive. Furthermore problems associated with mounting debt levels, and the possibility that the authorities will engineer negative real interest rates as a way of reducing the debt burden, are also supportive of silver, as well as gold and other hard assets."
The bank says the metal could also benefit from a shift in focus away from the crisis within the euro zone and toward the problems facing the US, especially during an election year.
"If recent progress in addressing the euro zone is built on, and were the EURO to strengthen, this would also support bullion prices, as silver, as well as gold has a traditional inverse relationship with the USD."
With regards its role as a safe haven, HSBC maintains that, while silver's reputation as a safe haven is secondary to that of gold's, "it is fair to say that silver, is also traditionally regarded as a safe haven asset. This view reflects the fact that silver, as well as gold, almost alone among all the widely accepted safe-haven assets, is not subject to government fiscal or monetary policies."
But, it is also quick to point out that silver has not behaved as a traditional safe haven since the sovereign risk crisis began in the euro zone. This, the bank says, is partly because silver had to compete with other so-called safe havens. But, more importantly than that, it says, "A characteristic of the financial crisis has been that assets are increasingly correlated and behave either as risk assets or safe havens... silver is one of the very few assets - along with gold - that has traded independently from safe havens including the USD and US Treasuries, as well as German and British government bonds."
It adds, "This implies to us that while silver is influenced by shifts in risk on/risk off sentiment, it is also influenced by its own supply/demand fundamentals and retains some degree of independence from other assets. That silver is not acting as a risk on or risk off asset increases its portfolio diversification value. Hence it may be attractive for investors wishing to maintain a risk-neutral portfolio, as well as for investors who may wish to seek some diversity from gold."
HSBC says it has lowered its 2012 average silver price forecast to USD31/oz from USD34/oz, but maintains its forecasts of USD32/oz for 2013 and USD28/oz for 2014.
By Geoff Candy