But industrial demand fell by about 6 percent for the year and the decline took some support out of spot prices. Silver barely broke the $35-an-ounce range during a short seasonal rally in the fall. In the last quarter of 2012, silver has lived up to its reputation, with 100-day historical volatility nearly twice as high as that of gold, as Silver Investing News reported Friday. That has left silver fighting to stay above $30 an ounce.

In 2013, silver's industrial demand side, which accounts for well over half of all silver demand, may continue to be the wild card in price performance for the white metal. Given that global economic uncertainty is expected to carry over from last year, Barclays (LSE:BARC) has said that in 2013 silver will most likely retain its position as the “most volatile” amongst metals in terms of “price action.”

If the financial crisis in Europe worsens and Washington fails to prevent the US from falling off the proverbial fiscal cliff, economic growth could slow, meaning that industrial demand for silver will suffer. Such a reality could have a far greater impact on spot prices given that the market is already oversupplied.

However, analysts are banking on improved economic growth in China and continued strength in emerging economies to support the global economic recovery going forward. Bank of America (NYSE:BAC) analysts have forecast an average of 3.2 percent in global economic growth in 2013.

The new year brings the possibility of modest growth in silver industrial demand if the global economic recovery continues. A recent Thomson Reuters GFMS report shows that industrial demand for silver will gain 6.7 percent in 2013 and 6 percent in 2014; a much-needed turnaround from last year's losses and a boon to silver prices if the other side of the coin, investment demand, proves strong in 2013.