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Over the past five years, the price of silver has exhibited a notable upward trajectory, reflecting a bullish trend in the commodities market. This increase can be attributed to a complex interplay of global economic shifts, monetary policy changes, and evolving industrial demands.
Silver has gained popularity among investors as a safe-haven asset, especially during times of financial uncertainty and inflationary pressures. The rise in silver prices also mirrors trends in other precious metals, often moving in tandem with gold as an alternative investment choice. Additionally, the growing industrial applications of silver, particularly in areas like renewable energy and electronics, have further fueled its demand and contributed to its price ascent.
Silver price today – silver chart
2024 Silver Price Forecast
The silver price forecast shows the possibility of going above $32 at the end of 2024. The 10-year silver price forecast offers the chance to go above $290 in the next ten years. Silver price projections are based on interest rates, technical analysis, and supply and demand projections.
Like other commodities, silver prices are influenced by various factors, including supply and demand dynamics, global economic conditions, monetary policy, and investor sentiment.
- Supply and Demand: If the supply of silver has been constrained due to mining issues or geopolitical factors while demand has remained steady or increased (e.g., for industrial uses, jewelry, or investment), this would support higher prices.
- Economic Conditions: Economic growth can lead to increased silver demand, especially in electronics and solar energy industries. Conversely, economic downturns can boost silver prices if investors consider it a safe-haven asset.
- Monetary Policy: Loose monetary policies, like low-interest rates and quantitative easing, often lead to bullish trends in precious metals. This is because they weaken the currency and drive investment towards assets like silver.
- Investor Sentiment: If investors anticipate inflation or seek to diversify their portfolios away from traditional assets like stocks and bonds, they may increase their holdings in silver, driving up its price.
Is the Price of Silver Going Up?
Yes, the silver price is going up because of the following factors:
- The recession is coming, and stocks are declining.
- Inflation is rising
- Huge silver demand. Silver will be critical to the solar power generation market over the next ten years.
- Technical analysis shows a bullish pattern on daily, weekly, and monthly charts.
Silver fundamental analysis – Interest rate and inflation
While inflation is rising and accurate, exciting rates are falling. Silver increases as more investors see precious metals as a better investment opportunity than bonds.
An interest rate is a percentage charged on the total amount you borrow or save. The nominal interest rate refers to the interest rate before considering inflation. Inflation is the rate at which the value of a currency is falling, and consequently, the general level of prices for goods and services is rising. The real interest rate is calculated as the difference between the nominal and inflation rates.
Silver and Green initiative
Silver represents raw material for photovoltaic (PV) cells, solar panels’ building blocks, and leading clean-energy technology. As a result, silver will be critical to the solar power generation market over the next ten years and essential in renewable energy production.
The Silver and Green initiative, focusing on the role of silver in renewable energy, particularly in solar power generation, can be detailed as follows:
- Key Component in Photovoltaic (PV) Cells:
- Silver is a vital component in manufacturing photovoltaic (PV) cells, which are the primary building blocks of solar panels.
- The metal’s excellent electrical conductivity makes it ideal for use in PV cells, which helps efficiently convert solar energy into electrical energy.
- Increasing Demand in the Solar Energy Sector:
- The demand for solar panels is rapidly increasing as the global focus shifts towards clean and renewable energy sources.
- This surge in solar energy adoption directly translates to a higher demand for silver, given its crucial role in solar panel production.
- Silver’s Role in Efficiency Improvement:
- Advances in solar technology often involve enhancing the efficiency of PV cells, where silver plays a significant role.
- Silver’s properties can significantly improve the efficiency of solar panels, making solar power a more viable and effective energy source.
- Impact on Silver Market and Prices:
- The growing solar industry is expected to impact the silver market significantly.
- As the demand for silver in solar panel production increases, this could lead to higher silver prices due to increased demand against limited supply pressures.
- Environmental and Economic Implications:
- Silver in solar energy contributes to environmental sustainability by promoting clean energy production.
- Economically, this creates a symbiotic relationship between the silver mining industry and the renewable energy sector, potentially leading to job creation and economic growth.
- Future Outlook:
- Over the next decade, silver’s role in the solar power generation market is anticipated to be substantial.
- As countries and companies invest more in renewable energy infrastructure, silver’s importance in this sector is expected to grow, marking it as a critical component in the transition to greener energy solutions.
Silver long-term technical analysis
In the last 50 years, silver has been on a moderate rising trend. Analyzing the previous 50 years’ chart shows the cup and handle pattern that projects a solid bullish trend. After a stable, rising trend during the 2008 crisis, the price is trying to break the historical maximum.
Wall Street Silver Analysis
The analysis and predictions of silver prices by Wall Street and central banks for 2023 and beyond vary widely, reflecting different perspectives on market dynamics, economic factors, and industrial demand. Here are some key predictions:
2023 Silver Price Predictions
- Bank of America: $25
- Commerzbank: $25, citing record industrial demand and potential benefits from the Federal Reserve’s interest rate policies.
- Wheaton Precious Metals: $20 – $30. They highlight a drop in silver production and the limited ability of mines to increase production rapidly.
- Degussa: $30, emphasizing the strength of demand for renewable energy technologies.
- Sprott Money: $38, expecting a shift in the Fed’s interest rate policies.
- Wells Fargo: Predicts a silver price target of $48 within five years, citing a super cycle in commodities and increasing demand from new technologies.
- InvestinHavenen: $34.70, with indicators like gold price correlation and inflation expectations supporting their prediction.
- Canadian Imperial Bank of Commerce: $23.50, foreseeing long-term impacts from the demand for solar panels and electric vehicles.
- Silver Institute: $23, influenced by the Fed’s economic policy.
- BMO Capital Markets: $21, acknowledging the risks of a global recession.
- Reuters: $23, slightly increasing to $24 in 2024.
Future Predictions Beyond 2023
- Robert Kiyosaki: Between $75 and $500 by 2025.
- Keith Neumeyer: Predicts $125 in the current market cycle.
- Silver Stock Investor: Forecasts $300 in the next 5 to 10 years.
- Rob McEwen, Executive Chairman, McEwen Mining: Expects $250 by 2027.
- David Morgan of the Morgan Report: Anticipates $50 in the short term.
These predictions reflect a range of factors, including industrial demand, especially from the solar and automotive sectors, macroeconomic policies, particularly those of the Federal Reserve, and broader market dynamics, such as investor sentiment and the gold-silver ratio. It is important to note that these predictions are speculative and influenced by a rapidly changing economic environment.
Silver Market Volatility
In general, ascertaining any asset’s price requires a lot of analysis; still, the answer is never absolutely accurate. Given the current crises, this has become an even more unpredictable task. In addition to the global pandemic, other factors can also influence the price of an asset. For example, the US presidential elections in 2020 made the financial market highly volatile, especially the value of the USD. Secondly, the COVID-19 cases are not flatlining globally, adding to economic anxiety and making economic recovery seem like a slow and distant dream. Many countries keep enforcing strict lockdowns as well.
Several key historical events and factors can characterize silver market volatility:
- Hunt Brothers’ Attempt to Corner the Market (1980): The Hunt brothers’ attempt to corner the silver market led to a massive spike in silver prices, reaching an all-time high of over $50 per ounce. A dramatic crash followed this as regulatory measures were introduced and the market corrected itself.
- Global Financial Crisis (2008): Silver prices saw significant fluctuations during the 2008 financial crisis. Initially, they fell sharply alongside other commodities but later surged as investors sought safe-haven assets.
- Economic Uncertainty and Safe-Haven Demand: Silver, like gold, is often seen as a safe-haven asset. In times of economic uncertainty, geopolitical tensions, or inflation fears, demand for silver can spike, leading to price volatility.
- Industrial Demand Fluctuations: Silver’s extensive industrial uses, particularly in electronics and solar panels, mean that changes in industrial demand can significantly affect its price. Economic cycles and technological advancements can lead to variable demand.
- Changes in Mining Output: The quantity of silver mined can impact its price. For instance, if major silver-producing countries face mining disruptions, it can lead to reduced supply and higher prices.
- Speculative Trading: Silver is heavily traded on commodity markets, and speculative trading can lead to price volatility. Futures and options markets, where traders bet on future price movements, can exaggerate price swings.
- Monetary Policy and Currency Movements: Silver prices are also influenced by monetary policies, like interest rate changes and quantitative easing, as well as fluctuations in currency values, particularly the US dollar.
These economic and political uncertainties hint that investors will continue to invest in precious metals like gold and silver, as they are often seen as global currencies. This means that silver prices will continue to enjoy support from the buyers.
Another aspect that needs to be highlighted is silver as both a precious and industrial metal. The economies have started to open up gradually, and while still slow, industrial activities are gaining momentum. Naturally, this will increase volatility in the silver market. However, this can also mean that while the prices may not see a sudden plunge this year, silver can be limited availability for industrial purposes as people are buying it for theiHavenen.
Conclusion
The silver market’s historical volatility is a testament to its sensitivity to various economic, industrial, and geopolitical factors. In recent years, rising industrial demand, especially from the renewable energy sector, and its status as a safe-haven asset have been key drivers of its price. Looking ahead, projections for silver prices in 2023 and beyond show a wide range of estimates, reflecting uncertainty and differing views on economic trends and industrial demand. While some analysts foresee significant price increases due to declining mine supply and increasing industrial usage, others remain cautious, highlighting potential economic headwinds and market dynamics. This blend of bullish and bearish outlooks underscores silver market predictions’ complex and speculative nature.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
