Every cloud has a silver lining, and for jewelers facing consumer demand destruction due to high gold prices, it would seem the silver lining is literal.
A Mineweb report notes that Indian silver exporters are experiencing a record level of demand, particularly from the US and Europe, for silver jewelry. The article quotes data from the Gems and Jewelery Export Promotion Council, which reveals that during 2011-12, silver jewelry exports grew by 44 percent compared with gold jewelry export growth of just 30 percent.
Year-on-year numbers for silver jewelry exports for FY12 stood at $694 million, against $484 million in FY11; while the buyer demographic has shifted down-market to sub-$100-per-item sales, in response (it is believed), to the state of the global economy.
In the US, the Silver Promotion Service of the Washington-based Silver Institute recently released the third of its annual surveys of silver jewelry sales with sales growing overall in 2011. Some 77 percent of surveyed jewelry retailers reported that their 2011 sales increased and 27 percent of those surveyed experienced an increase of more than 25 percent.
Intriguingly, it would seem sales of silver jewelry are running counter-sales of investment-grade silver coins, which have tumbled in the US. Coins News reported this week that US Mint distributors ordered just 20,000 ounces of Gold Eagles, off 68.0 percent from the prior month’s 62,500 ounces and down 81.5 percent from the 108,000 ounces sold in April 2011.
Although 99.9% fine Silver Eagle coin sales reached 1.52 million it was only thanks to a 200,000 pop on the final day, last month avoided a ranking of the slowest of the year and the worst since July 2008. As it stands, silver coin sales were still down 40.2 percent from the previous month and off 46.1 percent from April 2011.
So while cautious buyers are still finding favor with cheaper silver, the investment community is showing early signs of a loss in interest in both gold and silver as a store of value.