Silver’s slump even worse than gold – by Lisa Wright (Toronto Star – December 10, 2013)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

“Poor man’s gold” was the worst of the metals bunch in 2013 — and next year still a question mark for precious metals, says PWC annual report.

There’s a silver lining to the beating gold took this year: sidekick silver suffered the worst slump of any other metal in 2013. “Silver has had a terrible year,” says PwC Canada’s year-end mining report Metals Mired in Global Uncertainty.

Known as “poor man’s gold”, the lower-profile metal – used in everything from the auto industry to electronics and jewelry – has tumbled 40 per cent compared to a 30 per cent price drop in bullion, notes the annual study released Monday.

Silver started 2013 trading at $32 per ounce but sank to a low of $18.60 by mid-year. That’s a complete reversal from 2012, when silver was the best-performing metal overall, ranging in price between $26 and $37.

The drop is mainly due to less demand from China, where growth has slowed more than expected, along with the recent metals market meltdown, explained PwC mining expert Nochane Rousseau.

“When you look at the beginning of the year, I don’t think companies were expecting such a slump in commodities – and the biggest retreat was in silver,” he said.

While gold and silver were used historically as currency and coinage, they are increasingly regarded today as investment vehicles and industrial commodities. Investors buy precious metals as a safeguard against inflation and economic uncertainty.

Mexico is the biggest producer of silver, but it is also found in Canada, the U.S., Argentina, Chile and Peru, often as a byproduct of gold. It’s been more volatile than its more glamorous golden cousin, but the two tend to move in tandem on world markets, said Rousseau.

However gold producers are less optimistic heading into 2014, says the report, which surveyed 150 senior, mid-tier and junior miners of gold, silver and copper, most of which trade on the Toronto Stock Exchange.

Reflecting lower levels of confidence than a year ago, 47 per cent of gold producers expect the price to increase in the next 12 months, compared to 88 per cent being bullish on bullion in 2012.

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