The average 2011 silver price was $35.12, a result of increased investor enthusiasm and higher fabrication demand. Silver’s record price reflected fabrication demand at the second greatest level since the turn of the millennium. The 2011 record was more than twice the average 2009 price. Worldwide investment in silver also reached record levels at 282.2 million ounces.
A sixty percent gain in Chinese demand for bullion coins helped propel coin sales to a higher record than in 2010, while global fabrication of medals and coins increased nearly twenty percent. Investment in silver bars grew nearly seventy percent.
Higher silver mining labor costs, and lower above ground silver supplies also added to higher silver valuations, although the supply of scrap silver rose, due to increased recycling of silverware and jewelry. Silver demand declined in photography, medicine, jewelry and silverware, due to difficult global economic conditions.
Silver demand was significantly stronger in the first three quarters of 2011, but fell back during the fourth quarter as Europe began to experience greater systemic economic difficulties.
