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Silver in Bull Camp after Gains

The upbeat sentiment in markets has certainly help silver move toward the bull camp. Though market pressure is still strong and the spot price of silver continues to gain traction just over $31.00 per troy ounce, gains during difficult markets for gold as well as physical demand have placed silver on the watch list.

Wednesday brought a range of industrial metals to suffer on news of a decline in foreign investments in China and downgraded forecast for global economic growth from the World Bank. On Friday, news that China would reveal reports indicated higher growth with economic slowdown offset by central bank activity decreased the likelihood of further stimulus, but the price of silver held its ground.

In midday trade on Friday, U.S. silver futures for March delivery gained $0.04, 0.11 percent, to $31.85 per troy ounce. The spot price of gold gained $1.28, or 0.08 percent, to $1,689.07 per troy ounce. U.S. gold futures for February delivery shed a modest $2.60, or 0.13 percent, to $1,688.60 per troy ounce.

News surfaced Friday that the U.S. Mint has already exceeded sales of 5,000,000 ounces of silver this month. The U.S. Mint has temporarily suspended the 2013-dated American Eagle Silver Coin until the week of January 28, 2013, when it will be made available again through a rationing system. The 2013 American Silver Eagle was initially available to purchase from the U.S. Mint to its system of authorized distributors on January 7, 2013, just ten days ago.

Amid the record-breaking demand that saw the highest ever one-day sales for American Silver Eagles at over 3 million ounces on its initiation on January 7, the London Bullion Market Association has released its 2013 forecast, predicting the average silver price will gain 6.6 percent this year. The London Bullion Market Association has projected a rise of 5.1 percent in the average price of gold over 2013, indicating a possible outperformance of gold by silver in the current year.

Demand for physical silver from the U.S. Mint, which sold 33,742,500 ounces of 2012-dated American Eagle Silver Coins last year and sold out of four numismatic products, continues to be the story of the current silver market.

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