Commerzbank: Silver May Hit $21 This Year; $23 Next

Source:

"Silver may surge to highest price since 1980. . ."

Silver may surge to as much as $23 an ounce next year, the highest price since 1980, as investors seek a cheap alternative to gold and a global economic recovery boosts industrial demand, according to Commerzbank AG.

The metal may advance to as much as $21 an ounce by the end of this year, about 12% higher than yesterday's close, Eugen Weinberg, head of commodity research, wrote in a report, dubbing the metal "gold's little brother." Compared with gold, silver may be considered low priced, Weinberg wrote.

Gold surged to a record $1,265.30 an ounce yesterday as investors sought to preserve their wealth against declining currencies, and China's decision to drop the yuan's dollar peg boosted commodity prices. There's rising demand for silver, or "poor man's gold," the Perth Mint said earlier this month.

"Gold is still a priority for investors" who are looking for shelter from growing economic uncertainty, Ng Cheng Thye, a Singapore-based director at Standard Merchant Bank Ltd., said by phone today. There's also "a good chance for silver to rally higher," possibly to $20 an ounce, Ng said.

Silver for immediate delivery traded at $18.8213 an ounce at 4:43 p.m. in Singapore, 11% higher since the start of the year. Gold, which has risen 13% in 2010, was at $1,239.75 an ounce.

Weinberg's targets add to signs of increased investor interest in precious metals. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, have risen 15% in 2010 to a record 1,307.96 tons. The Perth Mint said Europe's debt crisis was spurring demand.

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