Economy

Silver price plummet hurts Guizhou

(Cntv.cn)
Updated: 2011-05-12 16:26

China's Southwest Guizhou province is feeling the pinch, from the fluctuating silver prices. It has the country's biggest silver jewelry processing industry. And as the value of their product dropped, so did the visitor numbers.

This is the biggest gold and silver jewelry processing market in the region. Customers flooded in to buy products, as the silver price rose.

But lately the price has tumbled, and the shops are empty.

Shoppers say the silver price is simply fluctuating too much.

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Yang Huimei, shopper in Guizhou province said "I haven't bought silver for 2 months. The price is too high, which makes doing business harder."

The silver price soared to about 10 thousand yuan ($1,540) per kilogram by the end of April, but it slumped at the beginning of May. The sudden movement has caught the industry unprepared.

When the silver price was steady at 5 yuan per gram in the first 4 months last year, there was plenty of stock and profits.

But with the unpredictable market, net profits have been almost halved.

Analysts say the silver price may keep falling in the short term, but will increase a little in the next year.

Sun Yanlin, Qiandongnan Assoc. of Silver Jewelry said "The price increased too much in the previous period. I predict it will continue to fall to about 8 yuan per gram in the short run, but it may rise to around 9 or 10 yuan per gram in the next year."

Although the falling price may be deterring buyers, the overall souvenir market isn't expected to be influenced too much.