Top 10 silver price predictions for 2012

Last spring’s rapid sell-off in silver prices burnt a lot of investors, and they’re hesitant to enter the precious metals market. Will that change in 2012?

While gold was up more than 10 percent in 2011, silver prices quietly declined for the year. No one wants to remember that fact. What everyone does remember, though, was the sizzling hot spike the metal had when it shot to nearly $50 an ounce in April. For the entire year, though, silver was actually down 10 percent, falling from $31 an ounce in January to $28 an ounce in December.

Silver’s fireworks saw the metal rise 80 percent in three months last spring. When prices collapsed, the bottom fell out just as quickly. The metal crumpled 30 percent in five days! That rapid sell-off burnt a lot of investors, and they’re likely hesitant to re-enter the market.

Here’s what the pros think in a round-up of the Top 10 silver price predictions for 2012 from various sources around the web:

1) $33.21 an ounce. A Reuters survey of 45 analysts predicts silver prices averaging $33.21 an ounce in 2012 and $35 an ounce in 2013.

2) $34 an ounce. With low interest rates from the Federal Reserve, James Steel, analyst at HSBC, tells TheStreet he sees silver prices averaging $34 an ounce in 2012. He believes increased industrial demand could make up for any price weakness.

3) $60 an ounce. David Morgan, the publisher of the Morgan Report, has called for $60 silver by year end. “The key is to get through that $50 psychological barrier,” Morgan told Hard Assets Investor recently. “It’s probably going to take a couple of tries. And I do believe at some point it will. Once it does that, you could see silver go up from $50 to $60 in a matter of two weeks.”

4) $44.49 an ounce. A survey of members of the London Bullion Market Association (LBMA) shows they’re anticipating an average silver price of $33.98 an ounce in 2012 with a year-long high of $44.49 (that would be good for a 30+ percent gain on the year), per MineWeb.

5) $32.70 an ounce. Credit Suisse lowered their silver forecast from $33.70 per ounce to $32.70 per ounce (per SilverInvestingNews), but they did expect that a growing appetite for risk among investors could help the metal rise higher.

6) $35.48 an ounce. Morgan Stanley slashed their 2012 prediction for silver prices in 2012 from $50 an ounce to an average of $35.48 (per SilverInvestingNews). That’s a cut of nearly 30 percent.

7) Between $22 and $45 an ounce. Barclays believes silver will average $32.50 an ounce in 2012, per CommodityOnline. They also believe the metal will demonstrate more of its infamous volatility by touching a low near $22 an ounce and a high of $45 an ounce.

8) $100 an ounce. “With gold having passed $1700 (twice the 1980 high of $850) already … it stands to reason that $100 (twice the 1980 high of $50) silver is achievable,” Hubert Moolman writes on SeekingAlpha. Moolman argues that silver shadows moves in gold by several years. Just as gold broke through all-time highs four years ago, he thinks silver’s poised to do the same in 2012.

9) $50-$99 an ounce. Newsletter writer Patrick A. Heller gives 50/50 odds that we’ll see silver prices between $50 and $99 an ounce in 2012, per CoinUpdate. That’s by far the most likely range he believes the metal will land in by the end of the year (although he does give 14 percent odds silver will close out 2012 between $25 and $49 an ounce).

10) THE OPTIMIST: $200 an ounce. Gijsbert Groenewegen of Silver Arrow Capital Management told Forbes last week that a crumbling dollar could thrust silver up to $200 an ounce (per IBTimes).

I fully expect gold and silver stocks to outperform bullion prices in 2012. Check out our new book Top 500 Gold and Silver Stocks to learn more about our favorite miners.


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