Last year's weak silver prices have been largely blamed on mainland selling as the Silver Institute yesterday found the People's Bank of China had been engaged in large-scale disposals. Silver last year averaged just US$5.22 an ounce, 5.81 per cent down on $5.542 in 1998. 'Again, the substantial flows of silver out of China helped keep the price in check [last year],' the World Silver 2000 report said. 'Going forward, a key question for the market is whether Chinese government sales will continue on the level seen [last year]. 'Given the very promising prospects for strong demand this year, the absence of such disposals on the same scale as seen [last year] could offer strength to the silver price [this year].' The mainland is thought to have built up a vast stockpile for its strategic silver reserve following years of excess production but the Silver Institute believed it had begun offloading stock - often below market prices - with countries such as India and Thailand the main recipients.
