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Silver demand to rise 3-5 pct in 2012: GFMS head

Thursday, April 19th

Silver sales for industrial applications as well as for jewelry, coins, silverware and photography should climb 3 to 5 percent this year as end-users replenish inventories that ran low late last year due to an economic slowdown, said the head of Thomson Reuters GFMS, a respected metals research firm.

However, the metal's price may not test all time highs as investor buying may remain subdued and the industry struggles to absorb a substantial surplus in the market, said Philip Klapwijk, global head of analytics of the London-based firm.

"In order for us to see prices to be sustained above the $30 an ounce level, we have to see a decent level of investment interest. Investors have to be willing to buy the surplus for the price to be maintained or move higher," Klapwijk told Reuters ahead of the release of the World Silver Survey.

"What we have seen year to date is reduced appetite from investors, which have led to silver prices not really repeating the performance that we saw last year," he said.

Klapwijk said silver's price could push toward $40 in the second half of 2012, but he did not expect it to rise to a record near $50. It traded at around $31.60 an ounce on Wednesday.

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