Heightened concern over renewed inflation is feeding the rally in silver and the upward move could drive the inflation hedge metal this year to as much as 9.00 dlrs per troy ounce Mike Boswell chairman of Sunshine Mining Co tolds in an interview. The anticipated higher inflation is being manifested in silver rather than in gold which is the traditional choice of inflation hedgers said Boswell. The strength could put silver in a range of 8.00 to 9.00 dlrs even without any material swings in supply/demand Boswell said. The buying interest for silver on the New York Commodity Exchange (Comex) continued strong with prices rising today to a September 1986 high of 6.465 dlrs per ounce. However gold lagged at 426.30 dlrs the strongest price since late January this year. Boswell said silver has been under-valued for so long relative to gold but its closing up the price gap. He noted that silver last year held at the depressed level of 5.00 dlrs while gold was soaring to more than 400.00 dlrs on concern over the heated political unrest in South Africa. The strength was not filtering down to silver last year. Now were seeing a delayed reaction the Sunshine Mining official said. Almost a year ago U.S. producers shut down two of their largest silver properties Sunshine and Hecla mining companies both located in Idaho. Boswell estimated that the closings slashed U.S. silver production by 10 mln ounces last year to less than 40 mln ounces. Low silver prices and high labor costs made it uneconomical to keep the mines opened he said. Increased imports from Mexico and Peru have made up for the loss of production in the United States which consumes 160 to 170 mln ounces annually Boswell said.
SUNSHINE MINING CHIEF SEES SILVER AT 9.00 DLRS