NEW YORK - November 29, 2010 - The price of silver is surging and so is business at many coin dealers across the country. At Plaza Collectibles, an appraisals shop in Manhattan, owner Lee Rosenbloom says he’s seeing a tremendous demand both in new and older silver coins. “This is probably the strongest demand there’s been in the last 25 years,” he says.

Silver prices have soared 60% in 2010, driven in large part by a strong investment demand, particularly strong buying of exchange-traded funds, or ETFs, backed by the physical metal.

“ETF demand has been an important driver of prices because investors have prepositioned themselves for this central bank buying by emerging markets,” says Francisco Blanch, Head of Global Commodity Research at Bank of America.

Other leading gold analysts agree this buying frenzy will continue. Philip Klapwijk, executive chairman of the consulting firm GFMS, says he expects to see $4 billion on a net basis flurrying into silver and gold investment this year. Holdings in the largest silver exchange-traded fund, iShares Silver Trust, are near a record high, trading up 62% year to date (as of closing on November 23).

According to Blanch, the increase in silver prices has also been spurred by a rise in industrial demand, which is up 18% year over year. A hike in demand for silver from solar panels and pent up demand from the industrial sector is helping to push up prices. He expects to see further growth next year but at a slower pace.