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Capital Economics expects higher metals output and Fed hiking to weigh on silver
Given that most silver is a by-product of mining for copper, gold, zinc and lead, analysts at Capital Economics believe that higher prices for industrial metals will see silver output bounce back by 3% in 2018 after a fall of 4% in 2017.
Primary silver mine output was also set to recover, they said, as temporary disruptions fade and Fresnillo ramped-up production at its San Julian mine in Mexico.
Nevertheless, the main catalyst to their end-2018 $16.0 per ounce price forecast for silver was likely to be policy tightening by the US Federal Reserve, they said.
Among some of those disruptions which were set to fade were the temporary suspension at Tahoe's Escobal mine in Guatemala and lower ore grades at South 32's Cannington mine Down Under and Polymetal's Dukat in Russia.