LONDON (Commodity Online): Silver investor interest is picking up but is not enough to drive prices higher just yet, said Barclays Capital in a commodities research note.

According to Barclays, mine supply continues to grow on a year-on-year basis while industrial demand is down year-on-year.

However, speculative net length by non-commercial futures traders has picked up to the highest level in nearly three months, although it remains below a year ago.

Meanwhile, including closed-end products, inflows into physically backed silver exchange-traded products have reached nearly 730 metric tons for the year to date.

“Metal held in trust across all ETPs has climbed to its highest since early May last year. Silver remains heavily dependent upon investor appetite to plug the fundamental gap, and we continue to expect the silver market to deliver a surplus in excess of 3,000 tons in 2012 (2013: 4,000 tons),” the British bank added.

But, despite the recovering investor participation, this year has highlighted that without sufficient interest, the likelihood of silver’s price upside has grown increasingly, Barclays concluded.