NEW YORK, NY -- (Marketwire) -- 10/03/11 -- September was not a kind month to Silver stocks, as a stronger dollar took away much of the metal's allure. Additionally, a slowing global economy has crimped industrial silver demand. The Bedford Report examines the outlook for companies 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:
Silver's dramatic September free-fall has been attributed to a weakening trend in the Asian region on speculation that European governments will find it difficult to contain the region's debt crisis and reverse gains registered by the US dollar against the euro, eroding the demand for precious metals as an alternative investment. Precious metals prices tend to move inversely to price of the dollar, as they lose their "safe haven" appeal.
Compounding the problems for silver stocks are heightened fears of a double dip recession. According to the Silver Institute more than 50 percent of Silver's use is industrial. With the economy slowing -- last week Citigroup cut their global gross domestic product forecasts for 2011 and 2012 as growth prospects "continue to deteriorate quickly" -- manufacturing use for silver could drop.
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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 have 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."
Great Panther Silver Limited engages in the acquisition, exploration, and development of precious and base metal properties in Mexico. Last month the company announced the discovery of additional high grade silver-gold mineralization in an extension of the Cata Mine in the core of the Guanajuato Mine Complex.
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