A group of analysts at the major financial services firm Citi believes that the increased investor interest in white metal is not enough to overcome weak supply and demand fundamentals. Silver remains to be a bearish call for Citi. It predicts the silver prices to decline further during the remaining quarters of the financial year.
Silver futures declined sharply, following Fed Reserve policy decision announcing no reduction to stimulus program. The prices of silver are on track to post a loss of nearly 29% in 2013.
According to Citi, a combination of steady mine supply growth, sluggish fabrication demand, silver’s close association with foundering gold and longer-term dollar strength is likely to put more downward pressure on silver. Prices are poised to head south during the rest of the year. The financial services firm is not upbeat on the strong demand pick up in silver ETF demand either. Citi doesn’t recommend silver as an investment idea for rest of the year.
Late last year, the firm had predicted the silver prices to average out at $31 per ounce in 2013.It also predicted that the silver prices would plunge to $26.50 per ounce by 2014.In a research note released yesterday, Citi predicts that the white metal would average at $21.45 per ounce in Q3 2013.In the subsequent quarter, the prices are expected to fall to as low as $20.20 per ounce.