LONDON (Commodity Online): Global woes and the uncertainty over the future have forced investors to go for bullion and the prospects for silver is extremely good in the coming years, said metal consultants CPM Group.

CPM projects that investors will purchase another 213.9 million ounces of silver in 2010. Given the severity of the financial imbalances now, and the fact that major governments have allowed them to compound over the ensuing three decades, it seems fair to assume that investors will remain concerned about their financial futures for years to come, and consequently remain interested in buying more silver to add to their portfolio.

Thus it is reasonable to assume that investors will continue to add large volumes of silver to their inventories in 2010 and for the next several years.

Talking about the supply situation, CPM said silver supply reached 826.1 million ounces last year. A further 2.3% increase to 845.1 million ounces is projected for 2010. Around 553.9 million ounces of silver was estimated to have been mined in the market economies in 2009.

Silver mine production rose in Peru and Mexico, the world's two largest silver miners, but fell in Australia, Canada and Chile last year. Silver production was unchanged in the US.

Last year Peru mined 123.9 million ounces of silver, up 4.6% from record silver production in 2008. The Antamina mine was the largest producing silver mine, mining 15.7 million ounces of silver last year, a 25.6% increase.

Mexico was the second largest producer of silver in 2009 with 194.7 million ounces or 19% of the market economy silver production. CPM forecasts that Mexican mine output will increase 14.6% this year to 120 million ounces.  The Fresnillo mine remains the largest Mexican silver mine with a record 35.4 million ounces mined last year.

Total fabrication demand for silver is estimated to have declined 11.3% in 2009 to 616.4 million ounces. Demand for silver in jewelry and silverware, which is currently the largest use of silver, declined last year as silver use declined in all of its major applications.

However, this year, the use of silver in jewelry and silverware is projected to rise 1.7% to 246.3 million ounces.

CPM forecasts that silver fabrication demand will reverse during the course this year, growing 2.4% to 631.2 million ounces.

CPM advises that most investors who purchase silver for its safe haven attributes are expected to continue buying silver or remain invested in the metal.