(Silver prices article updated with additional commentary and information.)
NEW YORK (TheStreet ) -- Silver prices hit $40 an ounce. This was the bullish signal many traders were waiting for and price targets now range from $45 to $50 for 2011. Voracious investment demand and turmoil in the Middle East-North Africa region have been pivotal to silver's pop, but don't tell the whole story.
Silver prices have a reputation of being manipulated, volatile and less liquid. Silver hit a record high of $50 an ounce in 1980 after the famous (or infamous) Hunt brothers bought the metal aggressively for seven years -- at one time owning more than 200 million ounces of silver.
Silver is also at the mercy of stocks. When equities plummet, investors are often forced to sell silver for cash, but any significant dip can trigger a wave of buying as investors purchase silver at "cheaper" prices, resulting in a strong tug of war. Because fewer people own silver than gold, the market is smaller, which results in violent price action. Here are five fundamental factors that will contribute to silver's strong price moves in 2011 and why many analysts think silver's bubble is far from bursting.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV