HSBC Lowers 2015 Silver Price Forecast to $17.05 per Ounce

The Bullion Desk reported that HSBC has lowered its 2015 silver price forecast due to weak investor sentiment. The bank now sees the white metal averaging $17.05 per ounce this year, down from its previous forecast of $17.65.

For 2016, HSBC sees the silver price averaging $17.65, down fairly significantly from its prior prediction of $20.50.

As quoted in the market news:

‘The impact of prices under $20 on primary mine output and investment, and the slowdown in gold and base metals production, lead us to look for a drop in 2015,’ it said.

Mine production will drop to 850 million ounces this year from 878 million ounces in 2014 and will continue to fall due to a lack of investment into near-term mine supply, although that this ultimately prove supportive of prices.

On the scrap side, supply will drop to 155 million ounces from 169 million ounces, following years of rapid growth. Overall supply this year will be 1.025 billion ounces.

HSBC attributed the drop to the continued stagnation in prices – silver at around $16.20 per ounce is almost 70 percent below its all-time high of $49.81.

On the demand side, an increase in industrial demand to 564 million ounces and jewellery to 295 million ounces will underpin an increase in demand of four percent to 1.112 billion ounces, it said.

Global industrial output will grow 3.2 percent this year, a slight decline from growth in 2014 of 3.3 percent. But most industrial silver is consumed in the emerging world; it forecasts growth in emerging markets a slightly better 4.1 percent.

Click here to read the full Bullion Desk report.