NEW YORK -- Demand for silver rose in 2005 to the highest level in five years as strength in jewelry and industrial products offset softness in photography and coins, the Silver Institute said yesterday.
The Washington, D.C.-based industry group also said its annual survey indicated investor demand for silver has been increasing, just as it has for gold.
``For much of 2005, investment demand in silver tracked moves in the gold prices, as well as expectations," the report said.
The report, which was prepared by London-based GFMS Ltd., a metals research company, said demand for silver for fabrication totaled 864.4 million troy ounces in 2005, up 3 percent from 839.4 million ounces in 2004 and the highest level since 866.8 million ounces in 2001.
Nearly half went for industrial products, especially in electronics and electrical sectors, with jewelry and silverware the next largest category.
The report said much of the growth in demand for jewelry and silverware was in China and India.
``Chinese silver jewelry and silverware demand rose by a stunning 20 percent in 2005," the report said. ``Indian fabrication for this category rose by 8.5 percent . . . while North America experienced its fourth successive year of growth."
Production at mines was a record 641.6 million ounces in 2005, up 3.4 percent from 620.4 million ounces in 2004. Other sources of silver were government sales and silver scrap.
Philip Klapwijk, executive chairman of GFMS Ltd., said he expects the price of silver this year to exceed last year's average of $7.31 per troy ounce. That, in turn, had been up from an average of $6.65 per ounce in 2004.