NEW YORK (TheStreet) -- The robust industrial and investment demand, outweighing production growth, will likely spike silver prices to new highs of $21 an ounce this year, according to some analysts. Currently, silver is trading at $19.41 per ounce for spot delivery on the New York Mercantile Exchange.

Silver is both a precious metal and an industrial metal. Thus, a strengthening dollar may erode silver's alternative investment demand, while the economic recovery may boost silver's industrial demand, which accounts for around half of the world's silver demand. New industrial uses such as in medical, solar energy and water purification applications will buoy silver demand.

Investments are estimated to account for higher growth rates in silver demand. Investment demand is projected to increase to 213.9 million ounces, or 24% of total demand, in 2010 from 209.7 million ounces in 2009, as silver's safe haven attributes are increasing investor appeal, resulting in adequate weight for the metal in their portfolios.

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