Goldman Sachs Group Inc. cut its gold price estimates April 10 and Societe Generale SA said the metal is in bubble territory on April 2. Barclays Plc, Credit Suisse Group AG, Danske Bank A/S and BNP Paribas SA are also among banks predicting lower average prices in 2014 than this year. Gold dropped as much as $205.65 an ounce, or 13 percent, over two days to yesterday.

Global Economy

The global economy will accelerate every quarter this year, according to a composite of economist estimates compiled by Bloomberg. U.S. equity indexes rose to records this month and the dollar had its best first quarter in three years. The gains are increasing speculation among investors that some central banks will curb stimulus programs and raise record-low interest rates that helped silver more than double since the end of 2008.

Several members of the Federal Open Market Committee said the central bank should begin limiting bond buying later this year and halt it by the end of December, according to the record of their March 19-20 meeting released April 10.

There are no signs of that yet, with the Federal Reserve saying March 20 that it will continue with $85 billion in monthly bond buying. European Central Bank President Mario Draghi said April 4 that policy makers “stand ready to act” and the Bank of Japan said the same day it will double the monetary base by the end of 2014 through purchases of government bonds, its biggest-ever round of asset purchases.

ETP Holdings

That may explain why investors’ holdings in ETPs backed by silver rose 3 percent to 19,478 metric tons this year, equal to more than nine months of global mine output. The U.S. Mint sold 14.2 million ounces of silver coins in the first quarter, 40 percent more than a year earlier, and demand since then already exceeded the total sold in April 2012, data on its website show.

Retail investors probably account for about 60 percent of silver ETP purchases in the U.S., according to Nik Bienkowski, a co-founder of London-based product provider Boost ETP LLP.

The additional buying in ETPs and coins is being eclipsed by the production glut from mines. Supply outpaced demand by a combined 15,247 tons in the past four years, with another 5,512- ton surplus seen in 2013, Barclays estimates. Inventories monitored by Comex reached 5,143.5 tons on April 2, the highest since August 1997, bourse data show.

China’s Stockpiles