Hesketh-Leihner Silver Price Forecast $75 in 2011

Online, May 7, 2011 (Newswire.com) - Forecasting prices for anything can be tricky. And a precious-metal commodity such as silver is no exception.
With gold holding the lead on silver - the performance of the so-called "yellow metal" holds the key to silver prices in the New Year.
For several years leading up to the 2008 stock-market panic, it typically took 55 ounces of silver to buy an ounce of gold. Today, a gold ounce will cost you 50 ounces of silver.
There's been a fundamental shift, where precious metals investors see silver as the "more-affordable" true-money option. So, we expect this newer 50:1 ratio to hold, and perhaps to even decline - which portends a relative out performance for silver versus gold. And that brings us back to our price prediction. If we use the current 50:1 ratio - and our expectation that gold will be trading at $1,900 an ounce by the end of 2011 - I believe we're looking at a target price for silver of $38 an ounce.
It's worth noting that Hesketh-Leihner predicted the current breakout in silver. As longtime observers of the mining, commodities and precious-metals markets, we'll be the first to admit that - as precious metals go - silver may not have quite the same mystique as gold.
But the "white metal" has its backers, too. In fact, when Hesketh-Leihner published its "How to Buy Gold" special report recently, one of the biggest questions that we received in response was: "When can you do the same for silver?"
When we published a full report on silver back in September - and recommended it as a "Buy" - the "white metal" was trading at about $19 an ounce. Readers who took our advice have reaped a 50% return in three months.
Although gold possesses the greatest allure of precious metals, silver has a longstanding tradition in many cultures - a tradition that in some cases reaches back thousands of years.
Here in Asia, silver alloys were still present in some of our everyday coins as recently as 40 years ago. Today, however, silver is no longer viewed that much as a monetary metal. But that's because about 40% of silver is used for industrial applications.
The physical silver market is small, with annual demand of slightly less than 900 million ounces.
Silver prices are volatile - on the upside and the downside. After hitting a bull-cycle high of nearly $21 in early 2008, the global financial crisis tipped silver prices into a near-free fall: They declined by more than 50% to drop into the $9 range later that year.
An important metric to understand and watch is the silver-to-gold ratio. It tells you how many ounces of silver it takes to buy one ounce of gold. Historically, that ratio is 16 to 1.
Since that financial-crisis nadir, silver prices have soared and have eclipsed that 2008 high.