While silver enjoyed a strong run during the first quarter of this year, hitting a six-month high of $14.30/oz, a recently published analysis by Fortis Bank/VM Group asserts the precious metal's price still appears to be hovering in something of a no-man's land.

Meanwhile, in a recently published analysis, metals analysts Carl Firman and Matthew Turner noted aggregate silver output for VM Group's top 20 miners declined almost 5% to 10,797t in the fourth quarter.

They forecast that silver mine production could be down by at least 700t, as miners maintain production cuts and delay mine start-ups.

Jessica Cross, VM Group CEO, forecasts most silver end use sectors to experience little or no growth at all this year due to the poor demand outlook and to restrictive credit lines.

Nonetheless, VM Group noted that the investment momentum for silver is still powerful, estimating that, by late April, the three silver ETFs had a total of 10,394 tonnes of silver, which is 2,140t more than at the end of 2008 when 2,325t were added in total.

Cross says the overall silver supply/demand balance forecast is for a narrowing surplus this year, as ETF demand takes up some of the slack from falling industrial demand, while mine supply decreases.  This surplus represents metal available to investors, and their appetite to absorb this metal will dictate price direction.

She predicts growth in the radio identification tag and photovoltaic sectors will slow this year, but should resume once global economic conditions improve. In the latter sector, we expect robust growth in 2010, as a portion of the U.S. stimulus package is directed into the renewable energy sector.