BMO Capital Markets predicts silver will average $20 per ounce this year and next, and is expected to decline to $15/oz in 2012. The analysts of BMO Research said they expect “stronger demand and lackluster supply growth to constrain the physical market and maintain silver as an outperformer for the next three years.”
“The sector is projected to operate near capacity, which is consistent with the US$18-20/oz marginal cost of production,” they forecast. However, the largest sources of secondary mined silver, zinc, lead and copper projects have either cutback or suspended production due to hefty inventories, which means “by-product silver supply growth will be somewhat limited for the next two years.”
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