Rare indeed for any banker to make a bullish call on silver.

Cheers - VHF

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Silver at $40 Will Be Best 2011 Metals Bet, Standard Bank's Ikemizu Says

By Yuriy Humber - Dec 15, 2010

(Bloomberg) Silver, the leading performer in metals this year, is likely to repeat its success in 2011, reaching $40 an ounce on new applications and industry demand, said the head of commodity trading in Japan at Standard Bank Plc.

The precious metal will likely outpace next year’s gains in gold, which should surpass $1,500 an ounce, and palladium, Bruce Ikemizu said today in an interview in Tokyo. “Unexpected” new applications for silver, such as in solar batteries, and industrial use that underpins 80 percent of demand, make the metal attractive to “a lot of famous investors, especially in the U.S.,” Ikemizu said, without giving more details.

Cotton alone has beaten silver in the UBS Bloomberg CMCI commodity index this year, gaining 92 percent to the metal’s 76 percent. The precious metal touched a 30-year high earlier this month to reach $30.7025 an ounce. Gold, which reached a record $1,431.25 an ounce on Dec. 7, has advanced 27 percent this year.

Federal Reserve Chairman Ben S. Bernanke spurred further gains in commodity prices, mostly denominated in U.S. dollars, when he said on Dec. 6 that the Fed may expand bond purchases beyond the $600 billion announced in November to prop up the fragile recovery in the economy.

The outlook from Ikemizu, who has traded commodities for more than 24 years and correctly forecast in June that gold will surpass $1,300, broadly concurs with the 2011 view of Deutsche Bank AG and Credit Suisse Group AG.

Credit Suisse sees silver averaging $30.10 an ounce, gold $1,490 an ounce, and palladium $795 an ounce next year, the bank said yesterday. Deutsche Bank has silver among its top 10 commodity trades in 2011, the bank said Dec. 13.

Silver holdings in ETPs rose for a fourth consecutive day today, expanding 73 metric tons to 15,163 tons for their highest level since at least February, data from four providers show.

Gold for immediate delivery declined 0.5 percent to $1,389.05 an ounce at 3:29 p.m. in Tokyo. Silver for immediate delivery declined 1 percent to $29.1625 an ounce.