By Allen Sykora
LONDON (Commodity Online):  Commerzbank looks for Silver to average $35 in the current quarter and rise to $40 by the end of 2012. “The deteriorating global economic outlook has had repercussions on the price of silver,” the bank says. Still, “the silver price is likely to recover from its current weakness and resume its upward trend in 2012.”

Meanwhile, Commerzbank sees upside potential in Gold and reiterates its forecast of $1,800 an ounce by the end of the year and a further increase to $1,900 next year.

The bank says the underlying factors have not changed in recent weeks. “Real interest rates are low or even negative. The euro-area government debt crisis has not been resolved,” Commerzbank says.

“Government debt in the major industrial countries is too high. Decision-makers at the Fed are increasingly considering another quantitative easing, which would undermine trust in the world’s main reserve currency--the dollar--further and cause central banks to diversify their currency reserves even more. Central banks have already become net buyers of gold. In view of rising demand from private households, India and China are becoming increasingly dependent on Gold imports.”

By Allen Sykora of Kitco News; asykora@kitco.com

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