Has The Price of Silver Already Discounted Weak Investment and Industrial Demand?

Precious metals analyst Suki Coper at Barclays takes a look at the silver market in an interview with Bloomberg Television.

Silver investors have endured a brutal year as the price of silver declined by $12.20 or 39.5% since  the beginning of the year.   Will the price of silver quickly recover as it did after the 2008 collapse or have the fundamentals changed so significantly that a price recovery may be years away?

Suki Coper notes that silver is struggling to find support from both industrial and investment demand which has turned “quite weak.”  Markets are a discounting mechanism and weak demand seems to already be reflected in the price of silver.  The next price move in silver may hinge on whether or not silver demand recovers from this point or continues to decline.

Ms. Coper notes that imports of silver by China, which had been an area of price support, are at the lowest level since January 2006.  The recent slowdown in economic growth in China along with a looming banking crisis does not bode well for a pickup of industrial demand for silver.

The influence of the Federal Reserve on silver could also be negative if the Fed gets more hawkish in its monetary policies.