Silver prices set to rise in 2013 thanks to China
Posted: Tuesday , 30 Oct 2012
MUMBAI (MINEWEB) - -
Investors in China are seeking out silver as an alternative value investment with the economy cooling for a seventh quarter. Research from Beijing Antaike notes that demand for silver is set to jump as much as 10% in 2013, with investors seeking to preserve their wealth.
Consumption may climb to 7,700 metric tonnes after gaining 6-8% in 2012, Shi Heqing, an analyst at Beijing Antaike, told Bloomberg recently. Even for China, this would be a record level. China is the world's second biggest user of the metal.
Silver soared 15% and holdings by exchange traded funds jumped 6.5% in 2012. The research firm said demand for silver is coming from jewellery and coins, which accounts for 33% of demand, and electrical appliances and solar panels.
A possible solar industry recovery is also expected to help the white metal's demand, with the government targeting 21 gigawatts of solar power installations by 2015. This compares to an installation of 2.6 gigawatts in 2011.
Moreover, statistics have also shown that overall jewellery sales in China rose 19.3% for the first eight months of 2012 as compared to last year. China's week-long National Day Holiday dubbed 'Golden Week' for domestic consumption lasted longer than usual this year, aiding sales.
Buyers mainly targeted gold and silver jewellery and clothes, according to statistics released by the Ministry of Commerce.
Chinese consumers also became top luxury buyers resulting in 25% of global purchases. Shoppers from the Asian continent are also pushing global sales of luxury items to new heights, aiding the sector post its third straight year of strong growth since the global recession.
While Europeans contributed 24%, Americans 20% and Japanese 14% to global luxury sales, China's retail and catering industries saw a surge in sales during the eight-day national holiday, driven by demand for jewellery, clothes and home appliances.
Combined sales of major retail enterprises in the country rose 15% to $126.3 billion during the September 30-October 7 holiday period as compared to the previous year's holiday period.
Even as the Shanghai Composite Index heads for a third straight annual drop, silver has climbed to touch 592 million ounces as of mid-October.
Source: Silver prices set to rise in 2013 thanks to China