Metals Focus anticipates recovery in silver coin, bar demand

New York (Mar 5)  Retail investment in silver coins has been weak in the early part of 2020 but should recover, said Metal Focus. The consultancy pointed out that sales of U.S. silver Eagle coins fell to 4.5 million in the first two months of the year from 6.18 million in the same period of 2019. A range-bound silver price has been a “challenge” for investment, Metals Focus said. Also, a number of retail investors have turned to silver-backed exchange-traded funds instead, Metals Focus said, with ETF silver holdings rising to 742 million ounces at the end of February from 729 million at the start of the year. “Looking ahead though, we still expect this year to see an eventual recovery, albeit modestly, in U.S. silver coin and bar demand,” Metals Focus said. “This is premised on our expectation that the silver price will break out to the upside, which in turn will encourage retail buying on two counts. First, given our view that institutional investment will strengthen (partly benefiting from positive spillover effects from gold), this will contribute to increased price volatility. As a result, the price dips that emerge will generate bargain hunting. Second, as positive price expectations emerge, some retail investors may buy into a rising market, with a view to gaining exposure to silver before prices strengthen further.”

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