NEW YORK, NY--(Marketwire -12/12/11)- Silver prices have been volatile in recent months as a slowing global economy has hurt industrial demand for the metal. On the upside, due to the unstable economy, HSBC analyst James Steel argues that investor demand for silver as a safe haven asset could be on the upswing heading into the New Year. "Coin and bar demand is a growing component of the silver market" Steel said. "We believe that demand for these products reflects widespread retail investor concerns about inflation, economic uncertainty, and fiscal profligacy, European sovereign-debt risks, and geopolitical tensions." The Paragon Report examines investing opportunities in the Silver Industry and provides equity research on Hecla Mining Co. (NYSE: HL - News) and Silvercorp Metals, Inc. (NYSE: SVM - News). Access to the full company reports can be found at:
HSBC recently lifted its 2012 and 2013 price targets for silver, arguing that strong bar and coin investment demand, together with growing interest in silver exchange-traded funds will prop up the precious metals market. "Silver prices (in the coming years) will reflect the interplay of many factors. The single biggest bullish factor, in our view, will be renewed investor demand," analyst James Steel said.
James Steel said he expects demand from silver exchange-traded funds will increase in 2012 if investors seek safe-haven assets. Also, increased industrial demand should support prices, but the pace of industrial consumption should moderate from 2011 levels, he said.
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Silver production across the globe continues to be on the upswing, as producers and streamers argue that the US Deficit and the European financial crisis will continue to provide a bullish backdrop for precious metals investments. In Peru, the world's second-largest producer of silver, for example, silver production rose 0.84% in October to 305,036 kilograms, compared to the year-earlier period.
Hecla Mining Company is the largest and lowest cash cost silver producer in the U.S. In the third quarter the company had 2.3 million ounces of silver production at an average cost of 67-cents per ounce, and silver prices that averaged $37 per ounce.
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- James Steel