Silver Price "Will Hit $50 Before Correcting"

goldnews.bullionvault.com

THE HEAD of a leading precious metals consultancy believes the Silver Price could continue to rise before a correction sets in.

"I think $50 will probably be taken out this year," said Philip Klapwijk, executive chairman of GFMS, quoted in the Financial Times.

Klapwijk does, however, sound a note of caution.

"When you see prices moving up so fast you have to be careful...I can't help but think that if we hit $50 we could see a significant correction driven by profit-taking."

Silver Prices have risen primarily as a result of strong investment demand, according to figures released by GFMS this week. The Silver Price rose 78% last year, with demand for investment the primary driver, states the World Silver Survey 2011 – produced by GFMS for the Washington-based Silver Institute.

The survey reports that a net $5.6 billion was invested in Silver last year, almost twice the figure for 2009. Industrial and jewelry demand also grew.

Supplies of Silver also rose, up 14.6% to 32,870 tonnes. Scrap supplies, net government sales and producer hedging drove much of this growth, with mine production only rising by 2.5%.