| Show a at BUSINESS t width STOCK I MARKET MARKETA t A I LOOK AT TilE THE SILVER SITUATION TIOSA A little over two months ago in late February the price of silver sliver surged upward to an almost incredible per ounce While the climb was generated partially by a powerful industrial demand industrial consumption in the free world rose an impressive 18 percent In 1973 extra pressure was also exerted by speculative activity quickening h inflation and higher world oil prices prices' fueled by the Arab embargo It is difficult to remember that in late 1971 the N. N Y price of silver had slipped to slightly below per ounce the lowest since August 22 1963 Where Next As the rising price spiral grew almost frantic earlier U this s year it became evident that the speculative fires almost certainly had to cool down Prices did in fact move off from their peak and have fluctuated well below the level even dipping under at one time as of this writing the price is close to Now of course the question is which way will silver prices head from here While some believe that the price will drop considerably further before leveling off others think that though prices will fluctuate widely they will generally remain at a high level and perhaps even spurt up again Bears Vs Bulls Those looking for lower prices cite a number of factors to support their views First is the business slowdown which they say will cut into industrial demand Noted too is the recent decision by the Indian government to lift that nations nation's ban on silver exports There are large quantities of aboveground aboveground aboveground above- above ground silver in India and in inthe inthe inthe the past past even even with the ban ban- ban vast amounts of silver have been illegally shipped to world markets Domestic supplies could be expanded by the proposed release of some million ounces of stockpiled silver needs Congressional approval while output would benefit from uninterrupted operation of the important Sunshine Mine which was closed for four months last year yearby yearby yearby by a strike and through most of 1972 by a fire The silver bears also are of the opinion that there are large quantities of in-ground in silver that could be mined profitably at or near current prices Likewise they mention continued efforts by silver users to find substitutes plus the possibility that this country may again allow Individual ownership of gold which could result in some switching by speculators from silver to gold Reply Of The Bulls The biggest argument of the silver bulls is the overheated ted rate of inflation It is their opinion that until inflation is controlled there will continue to tobe tobe tobe be a flight from paper currencies into gold and silver and they see little chance of containing inflation soon In fact they expect it may get worse before It gets better reflecting the removal of price curbs Indeed as measured by bythe bythe bythe the GNP price deflator inflation in ln did soar a at t a percent annual rate in the first quarter the worst burst of inflation tion since the f first quarter of 1951 They also aiso feel that prices willbe will willbe willbe be supported by the favorable production consumption equation world industrial consumption has exceeded new output by a large margin Because of the persistent production gap above ground silver stores have been dwin dwin- As one example they pointed to the absorption of large stocks of Treasury silver sliver Investment Opinion Speculative interest is likely to make the price of silver swing widely in either direction Babson's opinion is however that silver prices are apt to remain on the high side near term through another upsurge like that seen earlier this year seems unlikely Thus while bearish arguments are Impressive Babson's Research Department nt considers that the rate of Inflation inflation inflation in In- is the overriding factor While Babson's currently recommends retention of most leading silver sliver stocks sale of Day Mines common has been recommended Mrs Russell Montgomery recently spent several weeks in Colorado Springs with her daughter Janis and husband Derrell Weeks While she was there a new baby was born to the Weeks family a daughter Kristi KrisH Lynn Mr Montgomery and Mrs Bob Dob Craft went to Colorado Springs to visit the Weeks and Mrs Montgomery returned to Vernal with them |
