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Silver 'Significantly Overvalued,'
Investment Bank Fortis Cautions
By Angel Maytaal
Thursday, April 5, 2007
LONDON -- Silver is "significantly overvalued" and should retreat below 10 usd an ounce in the longer term, investment bank Fortis said in a monthly review of the metals market.
The bank said while a weak dollar and "investment marketing froth" might lead the metal toward the $15 an ounce level in the short term, this will not be sustained in the longer term.
"Reports from India suggest this key physical market may be growing disenchanted with silver jewellery. Meanwhile new mine supply ... is rapidly increasing," said the bank.
It noted Indian demand for silver slipped last year. Citing a report in India's Financial Express, the bank said demand for silver jewellery fell 33 percent last year while demand for silver for all fabrication purposes fell 9 percent.
At 1.30 p.m. spot silver was quoted up at $13.57 an ounce against the $13.56 level seen in late New York trades yesterday.
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