Metals May Be Set for Encore to Last Year's Climb

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"Gold was the only metal to have made a new all-time high [in 2009]"

It'll be tough for metals to outdo the spectacular annual gains they saw in 2009, but a few have a shot and most are likely to continue to see prices climb this year.

That's not a bad assessment for a market that's already posted yearly price gains of around 24% in gold, 49% in silver, 117% in palladium and nearly 140% in copper.

The precious metals group, overall, has the best chance at winning, according to many analysts.

"Investment demand will continue to rise as more and more folks hedge their exposure to fading fiat currencies," said Scott Wright, an analyst at Zeal LLC. "This will be done not only physically, but via ETFs."

At the same time, emerging-market demand will continue to drive the metals markets, said Brian Hicks, co-manager of the U.S. Global Investors Global Resources Fund (PSPFX).

"Despite the global slowdown, the secular trends of urbanization and industrialization in developing economies are still intact, which should support demand for raw materials," he said.

At first glance, gold's percentage climb in 2009 doesn't seem all that impressive. But it was the only metal to have made a new all-time high, according to Sam Kirtley, CEO of SK Options Trading. Futures prices climbed to a record above $1,200 an ounce in early December.

Both gold and silver could even show similar performances to last year, according to Gijsbert Groenewegen, a managing partner at Silver Arrow Capital Management.

U.S. "interest rates are likely to go up, not because there is inflation. . .but because there is such a huge issuance of new debt attracting less and less investors at these low levels," he said, explaining that higher interest rates are bad for equities, so investors may park their money in gold and silver to preserve it.

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