NEW YORK, NY -- (Marketwire) -- 10/24/11 -- Silver prices have been volatile of late as signs of a strengthening US economy has pushed the dollar up, and taken away the metal's safe haven appeal. Meanwhile, a slowing Asian economy has led to concerns regarding industrial silver demand. The Paragon Report examines investing opportunities in the Silver Industry and provides equity research on iShares Silver Trust (NYSE: SLV) and Great Panther Silver Ltd. (NYSE Amex: GPL) (TSX: GPR). Access to the full company reports can be found at:
In China, roughly 70 percent of the country's silver demand comes from the industrial sectors. Chinese customs data recently showed export growth falling last month more than expected, while import growth also slowed. China's third-quarter gross domestic product was up 9.1% from a year earlier, slowing from 9.5% growth in the second quarter and 9.7% growth in the first, China's National Bureau of Statistics said last week. Growth fell short of the median 9.2% forecast of 14 economists surveyed by Dow Jones Newswires.
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Silver mining stocks -- which have underperformed silver prices all year -- are also struggling. "Concerns about a possible hard landing for the Chinese economy has weighed on mining stocks," David Jones, chief marketing strategist at IG Index, explains. "It is difficult to see a catalyst for further gains in the short term."
Several marquee silver producers forecasted a drop in silver prices and took necessary precautions such as selling several mining sites. Many companies also increased hedging. Hedging programs allow producers to lock in current silver prices for future production, guarding against any potential price declines in the future.
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