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(Kitco News) – Silver bulls should have cause to celebrate once again in 2012, even though supply/demand hangovers caused by an intoxicating run to early-year record highs actually has them swallowing small losses for 2011.

Many experts predict silver prices will end 2012 at double or triple their mid-December level of around $29 an ounce, although a few bearish holdouts believe the market could lose another $10 from here.

DEMAND

“I see $60 silver by the end of 2012,” said David Morgan, independent precious metals analyst with Silver-Investor.com. “Demand from investors will pick up, as we see continued deterioration of the world financial system.”

HSBC Securities also foresees renewed investor interest and a 7% expansion in global demand in 2012, to an unprecedented 968 million ounces. TD Securities looks for an even greater 9% gain, to 1.021 billion ounces.

“Demand for silver will be sustained by global concerns about fiscal profligacy, political gridlock on dealing with the U.S. budget deficit, long-term sustainability of the U.S. dollar, potential inflationary consequences of highly accommodative monetary polices, and economic uncertainty,” HSBC said. “Coin and small-bar demand may moderate from current high levels, but remain strong, further contributing to silver price strength.”

HSBC predicts possible spikes to $40/oz “or even higher,” in 2012 and a season-average price of $34/oz.

“Silver acts like a precious metal on the way up and an industrial metal on the way down,” said Gijsbert Groenewegen, managing partner of Silver Arrow Capital Management in New York. “Silver will move contrary to the trend of the U.S. (dollar).”

Several analysts believe collapse of the euro is now all but inevitable; a watershed event which will send EU investors fleeing to the relative safety and liquidity of the huge U.S. bond/dollar market.

“Metals have mutated from ‘safe haven’ assets to ‘risk’ assets,” said Spencer Patton, founder of Steel Vine Investments, who predicts 2012 will end with silver quoted around $18. “I expect 2012 will present some major changes in the eurozone,” that will lead to weaker silver prices.

Groenewegen concurred, but warns that strength in the dollar — and accompanying weakness in demand for silver — may be very short-lived, however.

“The financial situation in the U.S. is not much better than the EU. If politicians fail to reduce the U.S. debt, interest rates will skyrocket and paper money will lose all credibility,” potentially sending silver spiking to stratospheric levels as high as $200-400.