Natixis Analysts Put 2014 Silver Base Case at $18.60

Mineweb reported that Natixis SA (EPA:KN) analysts Nic Brown and Bernard Dahdah believe that silver has a much worse downside than gold due to its lower average cash costs and the potential for a silver sell off.

As quoted in the market news:

Brown and Dahdah thus put their base case for silver at $18.60 an ounce this year and $15 an ounce next, while also emphasizing the potential for further drops with ‘ample’ silver supply available, it says, and the question of investment-silver stickiness looming large.

The analysts said:

At 19,700 tonnes, the amount of silver held in physically backed ETPs (exchange traded products) is equivalent to almost 80% of 2012’s mined output. If last year’s mass exit from gold ETPs was followed this year by sales from silver ETPs, this could rapidly turn into a substantial new source of supply just as happened with gold last year. Under these scenarios we could see silver prices fall to an average of $15/oz in 2014 and $10/oz in 2015.

Click here to read the full Mineweb report.