HSBC analyst, James Steel, has bumped up the price forecasts for silver in 2013 and 2014, after the precious metal continued to increase in popularity last year. In particular, silver sellers are triumphing over the holiday season’s sales figures. But where has this sudden rise come from, after many years of silver declining in value?
It seems that the popularity of silver has arisen from its retail price. At a time when everyone is trying to pinch a few pennies, silver is an affordable alternative to other precious metals. The global recession has put money into the pockets of silver sellers internationally, as many people are now more price conscious.
Many high-end jewellery shops still won’t sell silver, as it’s not deemed luxurious enough or rare. But according to Reuters, deluxe retailer, Tiffany, attributes one-quarter of their sales to silver jewellery. As the Americas are Tiffany’s biggest market, the economic slump has been troubling. Thanks to a more affordable selection of accessories under $500, Tiffany has managed to turn around their previous poor sales, because fewer people had enough money to afford top-end jewellery.
Silver Around The World
China, in particular, is a big fan of silver metal. In fact, this country has become one of silver’s highest consumers, with its silver jewellery market growing by 211% over the space of 9 years. As China is becoming more affluent and industrial, urbanisation has led to many jewellery shops opening in Chinese cities.
The growing middle class in Asia is great news for the jewellery industry as a whole, but the western world is still very much in the silver institutes peripheral. Optimism largely stems from a recovering economy in the US. In 2011, demand dropped by 4.5%, but that’s now picking up again.
Unfortunately for silver lovers, this new interest in silver means only one thing – higher prices. Instead of becoming off-putting, it’s predicted that silver will still remain popular because it’ll still fall below the price of gold.
In India, the rupee is struggling against the American dollar, and because silver prices have skyrocketed by 33%, demand is suffering.
Due to Indian custom, many tribal women would wear heavy silver jewellery, but because of the costs involved and their exposure to westernisation, women are beginning to prefer lighter accessories.
There’s no cause for concern, however, in India, as their Gems and Jewellery Export Promotion Council expect silver jewellery to rise between 25% and 30%, because of India’s growth forecast.
Where Does The Silver Come From?
During 2011, 69% of silver came from the Bingham Canyon copper mine and 31% came from recycled sources in the United States. Returning to its roots, silver is now being considered a money metal again. Both mine and recycled sources of silver have been increasing over recent years, and the future only looks good for sellers of this precious metal.
Ava is a finance and fashion writer. Today’s guest post is on behalf of Pearl and Butler costume jewellery necklace online store.