Silver outlook bullish for 2011 and into 2012-Thomson Reuters-GFMS

A new Thomson Reuters-GFMS report, commissioned by The Silver Institute, forecasts silver investment will achieve yet another historically high total this year in spite of a significant level of position unwinding by institutional investors. In the report, "The Silver Investment Market-An Update, November 2011", Thomson Reuters-GFMS says the outlook for silver prices remains bullish, "with the potential of prices nearing, if not exceeding, the $40/oz, a realistic prospect as the fourth quarter develops." "However, should silver exceed $40," the report cautioned, "some unwinding may occur, principally of institutional positions, given their focus on upside potential. This raises the possibility of some deleveraging in the future markets." However, the study noted, "this should have little impact on silver's safe haven qualities, with the potential for retail and HNW [high-net-worth] investors to raise their asset allocation (in favor of both silver and gold." This situation "argues well for bullion coin and small bar demand, not only in western markets, but also in India and China." Indian physical investment demand could comfortably exceed 45 million ounces this year, up from 29 million ounces last year. "Overall, therefore, world investment demand in 2011 is expected to realize a near record high total in volume terms," the report predicted, and "in value terms likely to reach $10bn on a net basis for the first time."

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