Gold Market Regains Footing after Being Routed in April
There is an old expression that says "sell in May and go away." Gold investors either got a head start in April or the worst is yet to come. Gold did manage to claw back half of its April losses by the end of the month. On May 1, gold prices closed at $1,458.10/oz. As a point of reference, E&MJ's Price Index in the April edition listed the gold price as $1,595.80/oz (March 28, 2013). Month-to-month, that was a $137.70/oz loss (or 8.6%), but there is much more to the story.
Industrial Uses Forecast to Boost Demand for Silver
Industrial demand for silver has increased substantially over the past two decades and is expected to soar to a new record level in 2013. Speaking at the annual Prospectors & Developers Association of Canada convention in Toronto, Michael DiRienzo, executive director for the Silver Institute, said that demand for silver is broadening in many directions. Industry's widening use of the precious metal is expected to average more than 483 million oz from 2012 to 2014, a level 53% greater than the average annual industrial fabrication demand of 313.4 million oz from 1992-2001.
Silver provides a unique combination of properties that make it ideal for applications in industries ranging from health and medicine to electronics, communications, solar power, batteries, superconductors and computers, as well as jewelry and silverware. Silver withstands extreme temperatures, serves as an excellent reflector of light and conductor of heat and electricity, and is a natural anti-microbial agent.
"Silver helps make today's interconnected lifestyle possible and is a vital component of virtually every automobile, cell and smartphone, computer and laptop, appliance and electronic device we use. Further, silver's antibacterial properties are finding new uses in textiles, medical instruments and hospital equipment, providing an effective tool in combatting infection and bacteria," DiRienzo said.
As industry continues its wide-ranging use of silver, investors are also increasingly acquiring silver bullion, seeking the safety of the precious metal as a store of value. Investor demand for silver can be seen in the record-shattering sale of 7.5 million American Eagle Silver Bullion coins by the U.S. Mint in January of this year. In fact, over the first two months of 2013, investors purchased 10.9 million American Eagle Silver Bullion coins, up by 43% over the sale of the coins in the first two months of 2012.
Further, Exchange Traded Funds (ETFs) that track physical backed silver are at a record high. As of March 8, total silver ETF holdings were 653.7 million oz, up by 22 million oz from year-end 2012. "Clearly, investor demand for silver remains buoyant by any measure," DiRienzo said.
Established in 1971, the Silver Institute serves as the industry's voice in increasing public understanding of the many uses and values of silver. www.silverinstitute.org.
E&MJ PRICES INDEX
(March 28, 2013)
|Precious Metals ($/oz)||Base Metals ($/mt)||Minor Metals ($/mt)||Exchange Rates (U.S.$ Equivalent)|
|Palladium||$770.00||Nickel||$16,540.00||Iron Ore ($/dmt)||Australia ($)||1.0423|
|Rhodium||$1,230.00||Tin||$23,150.00||Fe CFR China||$137.00||South Africa (Rand)||0.1084|
Gold and silver prices provided by KITCO Bullion dealers (http://www.kitco.com). Platinum group metals prices provided by Johnson Matthey (http://www.platinum.matthey.com).
Access to Lithium in North America Will Determine the Success of EVs and Hybrids
Lithium is a key component of lithium-ion battery packs that power electric vehicles (EV) and hybrid vehicles. A recent report from Pike Research forecast global sales of EV charging equipment will grow from 200,000 units sold in 2012 to nearly 2.4 million in 2020, representing a compound annual growth rate of 37%.
Lead and Zinc Remain in Over Supply
The International Lead and Zinc Study Group (ILZSG) released preliminary 2012 data for world lead and zinc supply and demand. The global supply of refined lead metal exceeded demand by 64,000 metric tons (mt). Inventories reported by the London Metal Exchange (LME), Shanghai Future Exchange (SHFE) and producers and consumers increased by 23,000 mt totaling 628,000 mt at the year end.
Moly Markets Bounce Back
Global demand for molybdenum bounced back from the impact of the global economic downturn, growing by just over 11% in 2010 and a further 9% in 2011 according to a new report from Roskill, Molybdenum: Market Outlook to 2016.