Frik Els , Editor

Commodity Online reports it will be investment demand that will likely drive up the price of silver in 2012. The same macroeconomic factors that impact on gold, also affect silver. As ‘poor man’s gold’ silver offers a more accessible entry point into precious metals investment. China’s leading market for precious metals trading on Friday increased its silver margin requirements to a fresh high amid heightened volatility in precious metals. Silver on Monday shed $1.30, or 4%, to $31.12 an ounce. Silver prices so far this year have averaged $35.70, a rise of 88% year-on-year, but is down from a record high of $48.61 at the end of April.

Gold for December delivery lost over $39 an ounce, or more than 2%, to trade at $1,685.40 an ounce on the Comex division of the New York Mercantile Exchange by midday on Monday. The losses were on top of a 3.6% slide last week and brings the decline in the metal from its November high to $110/oz. Bullion jumped to a record $1,921.15 an ounce on Sept. 6 and has now shown 11 consecutive years of price gains, but volatility in the gold market is increasing and the gap between gold’s highs and lows this year have reached more than $600, the largest since the 1960s. Gold has averaged about $1,705 so far this quarter and $1,563 in 2011, figures compiled by Bloomberg show.

Reuters reports copper hit its lowest in nearly a month on Monday as investors, already mired in worries over Europe's debt, digested news that US plans to combat debt are in disarray and took in warnings from China about gloomy global growth prospects. While US politicians' inability to reach consensus on tackling the country's debt problems was greeted with little surprise and the Europe crisis has been foremost in investors' minds for months, the statements by China's Vice Premier overnight really knocked sentiment. Wang Qishan said that a long-term global recession is certain to happen and China must focus on domestic problems. China is the world's top copper consumer, taking in about 40% of the world's copper versus Europe that accounts for 19% of demand.

Emerging from a short and distort saga awash in cash, Silvercorp Metals on Monday announced the acquisition of SX Gold, a mining concern controlled by the Luoyang city government in northeastern China's Henan province for $22.7 million. Earlier this month the company, the largest silver miner in China, increased its quarterly dividend by 25% to 2.5 cents, after reporting a big jump in second-quarter profit and record cash flows. The stellar financial results came after a forensic accounting report showed no truth to allegations of $1 billion in accounting fraud at the company which was first alleged on September 2 by shortsellers that had built up a massive position in the stock.

The Globe & Mail reports local authorities in the Pakistani province of Balochistan refused to meet Tethyan Copper, a joint venture between Chile’s Antofagasta and Barrick Gold, for talks before rejecting a bid for one of the world's richest deposits of gold and copper at a remote site in the dry hills near the Afghan-Pakistan border, known as Reko Diq. Tethyan Copper said a “summary decision” by the restive province to reject a mining lease application for its Reko Diq project breached local rules and Pakistani law and has now filed a "notice of dispute." The company submitted a feasibility study earlier this year that indicated 22 billion lb of copper and 13 million oz of gold at the site. The Balochistan decision now paves the way for a Chinese consortium to construct a mine and processing facility.

Marketwatch reports China’s leading market for precious metals trading increased its silver margin requirements Friday to a fresh high amid heightened volatility in precious metals. The Shanghai Gold Exchange lifted silver margin requirements to 18% of a contract’s value, up from 15% previously, according to data provided by ScotiaMocca, the metals unit of Scotia Capital. In morning trade in New York silver for December delivery was up 1.2% at $31.90 an ounce after retreating in East Asia and recovering from a 7% tumble on Thursday. Yesterday a Reuters poll predicted silver at $50/oz at the end of next year, exceeding the $48.61 record high set in April.

Aurico announced on Friday open pit pre-production development has commenced at its Young-Davidson project after the company completed the first open pit blast on Thursday. Commissioning of the Young-Davidson mine project remains on schedule with the first gold pour anticipated for the end of March 2012. The 100%-owned Young-Davidson gold mine in northern Ontario is expected to produce 200,000 ounces per year by 2015. AuRico Gold has projects in Canada, Mexico and Australia and five operating properties including the Ocampo mine in Chihuahua State, the El Chanate mine in Sonora State, the El Cubo mine in Guanajuato State, as well as the Fosterville and Stawell gold mines in Victoria, Australia.

The International Energy agency says in its World Energy Outlook 2011 released last week, widespread deployment of more efficient coal-fired power plants and carbon capture and storage (CCS) technology could boost the long-term prospects for coal, but there are still considerable hurdles. The agency says more efficient technology for new coal power plants would require relatively small additional investments, but improving efficiency levels at existing plants would come at a much higher cost. The IEA says If CCS is not widely deployed in the 2020s, an "extraordinary burden" would rest on other low-carbon technologies to deliver lower emissions in line with global climate objectives. Today only two small pilot projects in Germany and the US exist and a $4.8 billion project in the UK, which would be the world's largest appears to be going nowhere.

Gold futures for December delivery dropped 3.2%  or $57 to $1,717.30 an ounce on the Comex division of the New York Mercantile Exchange by early afternoon on Thursday. Gold's weakness flies in the face of new data from the World Gold Council showing investment demand at record highs and voracious jewelry demand from China, and investment bank Morgan Stanley picking gold as its top commodity for 2012 and predicting a price of $2,200 an ounce in the first half.

According to the World Gold Council’s Gold Demand Trends report for the third quarter 2011 released today, demand reached 1,053.9 tonnes, an increase of 6% compared to the same period last year. This equates to $57.7bn, an all-time high in value terms. The increase was driven by investment demand which rose by 33% year-on-year to 468.1 tonnes, generating record quarterly demand of $25.6bn, and came despite a steep drop-off Indian jewellery demand which was down 26% thanks to disappointing Diwali sales.Chinese jewellery demand was 13% higher year-on-year at 131.0 tonnes and topped Indian sales for the first time as Chinese jewellers expand outside the bigger cities.