wall street journal: silver predictors feeling the uncertainty

crafty09 · Jun 12, 2012

http://online.wsj.com/article/SB10001424052702303768104577460070249300322.html

A lot of realistic observations in this article. Sad truth is it's going to be a long wait for silver to start breaking records.

jossilver123 · Jun 12, 2012

We cant read the full article unless we have a subscription. Could you post it here?

Fykus · Jun 12, 2012

I was wondering what the go with that was.

Syd888 · Jun 12, 2012

Here is the full text:

Silver Watchers Temper Their Views
Forecasts For the Devil's Metal Revised Downward as Investors Lose Appetite Amid Global Economic Uncertainty

By FRANCESCA FREEMAN and RHIANNON HOYLE

Is silver's $50 ticket anything more than a pipe dream these days?

Last year, silver peaked at $49.83 per troy ounce. Even after dropping back, metals consultancy GFMS, a unit of Thomson Reuters Corp., was forecasting as recently as November that silver would average $45 a troy ounce this year and break through the psychologically important $50 level by the year-end.

But front-month silver futures closed Monday in New York at $28.61, 24% down from its 2012 high of $37.49, reached in late February. And GFMS has considerably pared back its expectations: It said in April that it expects silver to trade in a range of $28 to "just north" of $40 for the remainder of 2012.

Other analysts have similarly revised their expectations lower. BNP Paribas in May dropped its average price forecast for this year to $33.10 and Australia & New Zealand Banking Group Ltd. last week trimmed its 2012 estimate to $31.70.

A return to a silver price of around $50 now seems very unlikely, according to ANZ analyst Natalie Robertson.

So, where did earlier forecasts go wrong? Few could have predicted how quickly Europe could have slumped again into crisis, but silver's problem has been magnified by the growing influence of investors.

The investment community accounted for 282.2 million ounces of global silver demand in 2011, according to GFMS. This is the equivalent to a new all-time high of nearly $10 billion in value terms, and around 27% of total silver demand. By comparison, just five years earlier in 2006, global silver investment totaled 94.9 million ounces, or 10% of overall demand.

"As such, sustained silver price rises are unlikely without increased buying by noncommercial market participants," said Bank of America Merrill Lynch.

But investor demand is slowing. U.S. Mint sales of American Eagle coins, seen as an indicator of demand, amounted to 2.875 million troy ounces in silver in May, 21.3% lower than the 3.654 million troy ounces in the same month of 2011. The Mint's April silver coin sales were particularly bad, coming in at only 1.52 million ounces, down 40% on the previous month and 46% on the year-earlier period.

The decreased investor appetite is at least partly due to the economic uncertainty. Although silver often benefits from being a more affordable hedge against economic insecurity than goldthe traditional "safe haven"it has a range of industrial applications, which means it can also act as a risk-related asset.

"Late last year, China was still chugging along, and the U.S. was doing OK. These two locomotives were able to compensate for the travails in Europe. Now, there are too many headwinds in the global economy for people to feel confident about buying risky assets," said Robin Bhar of Socit Gnrale.

A significant recovery in the price of goldwhich has been floundering alongside risk-related assets in recent monthscould potentially see silver pulled higher on gold's coattails.

But the risks posed by a further deterioration in the global economic situation outweigh the potential upside from a rising gold price, say analysts.

"There are just too many negatives for silver," said Mr. Bhar of Socit Gnrale. "Negative investor sentiment combined with weakening industrial activity, plus the possibility that there are some investors in the market waiting to sell into rallies, suggests that silver even getting above $40, let alone $50, is far too ambitious."
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Water&Food · Jun 12, 2012

i recommend subscribing to wsj... better than reading financial review
highly customizable profile to alert you to feeds and articles that you are only interested in
for example, you can choose to only get feeds that contain anything to do with gold and/or silver related articles - and i mean fkn all...
wsj definitely has a trend for beating others to the punch most times
obviously you will hardly get any controversial 'zerohedge' commentary
.

thatguy · Jun 12, 2012

Silver Watchers Temper Their Views
But front-month silver futures closed Monday in New York at $28.61, 24% down from its 2012 high of $37.49, reached in late February. And GFMS has considerably pared back its expectations: It said in April that it expects silver to trade in a range of $28 to "just north" of $40 for the remainder of 2012.

Other analysts have similarly revised their expectations lower. BNP Paribas in May dropped its average price forecast for this year to $33.10 and Australia & New Zealand Banking Group Ltd. last week trimmed its 2012 estimate to $31.70.
Click to expand...

Q? How did these guys go with picking the Ramp up to $49.83?? If they missed it the what makes anyone think they know a damn thing?

Water&Food · Jun 12, 2012

thatguy, i agree, that is why you should first rely on zerohedge and secondly on wsj.
wsj is only good and worth while for a wider range of rants

Matthew 26:14 · Jun 12, 2012

So let me get this straight. The "experts" were saying silver to go through $50 by mid year and they were wrong. Now the "experts" have dropped their forecasts to the $30-$40 range and they are to be believed.

Hang on a minute.... these "experts" were wrong on their $50+ targets but their $30-$40 range is to be believed?!?!

Got it wrong once fellas, you can certainly get it wrong again....

Ag · Jun 12, 2012

Matthew 26:14 said:

So let me get this straight. The "experts" were saying silver to go through $50 by mid year and they were wrong. Now the "experts" have dropped their forecasts to the $30-$40 range and they are to be believed.

Hang on a minute.... these "experts" were wrong on their $50+ targets but their $30-$40 range is to be believed?!?!

Got it wrong once fellas, you can certainly get it wrong again....
Click to expand...

Few of us will pick it...collectively we might get within 15%...the rest will be woulda,coulda and bloody shoulda

crafty09 · Jun 12, 2012

Sorry about posting a bad link everybody. I'm not subscribed, but managed to read the entire article on my phone after navigating there from google... No idea how that worked, especially since I'm on my computer now and can't read the whole thing.

Weird.

crojo · Jun 12, 2012

Good, gives me more time to stack as much as I can.

I like silver for the long term not month by month, if I knew how things were going to pan out I woulda shoulda bought shit loads more when I started stacking in 1998, thems the breaks.

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