We look at the factors affecting the silver market and where should investors expect the market to move next, including some of the latest silver forecasts & price predictions from analysts.
Silver spot prices have outperformed gold in 2024, rising almost 20% to test the all-time high around $30 at the beginning of the quarter. This rally was driven primarily by the geopolitics risks, U.S. interest rate cut expectations and a rise in global industrial demand for silver to a fresh record high this year, according to the Silver Institute's World Silver Survey.
That was supported by rising demand from "green economy applications," including the solar industry, which uses the metal in photovoltaics, or the conversion of light into electricity.
Overall global demand for silver "massively exceeded" supply last year, with that deficit expected to extend into a fourth consecutive year in 2024, the survey said.
Silver Forecast & Price Prediction – Summary
- Silver price forecast Q2 2024: Silver prices could decrease in the coming weeks after testing the 10-year high around $30 per ounce at the beginning of the quarter. towards the 26.00 support level before bouncing back towards the 28.70-30.00 resistance level.
- Silver price prediction 2024: Silver prices are forecasted to rise to new all-time highs in 2024, as overall global demand for silver “massively exceeded” supply last year, with that deficit expected to extend into a fourth consecutive year in 2024. Global experts are predicting silver may hit a high of US$48 this year, due to geopolitical issues and a year featuring several significant elections.
- Silver price prediction for the next 5 years and beyond: Silver rate has been heavily influenced by weak industrial production and a lack of investor interest globally. However, if the continued focus on the energy transition is accompanied by stronger global growth, silver prices should push above the $50 mark.
With CAPEX.com you can trade Silver futures through CFDs if you want to speculate on price movements or invest in silver mining stocks and ETFs.
Silver Forecast 2024 - Fundamental Outlook: On track for a 4th straight yearly supply deficit
Silver’s outlook in the coming few months depends heavily upon two factors:
Investors are keeping an eye on the rate and pace of the US Federal Reserve and other central banks’ interest rate hikes in the coming months, due to how they are likely to affect precious metals and other commodities.
The progress of the Middle East and Russian conflicts is also a key factor for metal prices, as currently, silver is also seeing some safe-haven demand, as the crisis rages on. This is also likely to continue due to expectations of slowing global economic growth this year, as well as a mild recession.
It is important to understand that Silver serves two primary functions. It’s a precious metal with a monetary role and an industrial metal with numerous and growing applications. It’s also in jewelry and silverware and other objects, of course, but predicting the price comes mostly from these two functions…
When assessing the state of the silver market, analysts focus on for key areas: mine supply, traditional industrial demand, investment demand and green demand.
Silver demand heads for a fresh record high
According to an annual analysis from the Silver Institute, the worldwide market for silver is forecasted to have a fourth consecutive year of supply shortfall. This year, silver has outperformed gold in terms of gains.
The World Silver Survey, which was issued on mid-April, indicates that the worldwide industrial demand for silver is forecasted to grow to a new record high this year, contributing to the shortage.
In 2023, the demand for silver in industrial applications increased by 11%, reaching a record-breaking 654.4 million ounces, according to the report. The solar industry, which employs the metal in photovoltaics, or the conversion of light into power, as well as other "green economy applications," backed that.
According to the report, the demand for silver "massively exceeded" supply globally last year, and in 2024 it is predicted to continue for a fourth year in a row.
According to Metals Focus there is an estimated silver-market deficit of 184.3 million ounces for 2023. That is the second highest on record, with 2022’s deficit of 263.5 million ounces marking a record high.
Silver outpaces gold’s rise
Given the substantial increase in gold prices since the year's beginning and their ascent to several all-time highs, the Silver Institute suggested that more price gains for silver might have been anticipated against this progressively positive backdrop.
On April 12, gold futures, the most actively traded commodity so far this year according to Dow Jones Market Data, traded above $2,407.80 an ounce on Comex, marking their 19th record-high close. On the other hand, after 13 straight sessions of advances, silver futures traded close to $30 an ounce, the highest level since February 2021.
Still, silver has managed to outpace gold’s rise year to date, with silver up around 18% and gold up around 16%. according to the latest gold forecast and price predictions.
According to the Silver Institute poll, there is a "traditional view that silver will outperform gold in a bull market, but so far this has been muted." It also stated that since 2023, silver prices have encountered firm resistance around $25.
It said that while silver has "not enjoyed to anywhere near the same extent," gold has profited from "broad safe-haven buying and reserve/portfolio diversification among central banks and investors with a longer-term horizon."
The survey also emphasised the long-term effects of China's real estate crisis on the local economy and how this has affected base metal pricing and demand, particularly silver.
Supply deficit and investor interest
After a 28% drop in physical investment to a three-year low, the global silver supply gap shrank by 30% in the previous year. For the first time since 2018, there was a yearly decline in sales of silver bars and coins as well.
According to a poll conducted by the Silver Institute, industrial demand is likely to rise by 9% this year, setting a record high, while the silver supply gap is predicted to increase by 17% to 215.3 million ounces.
According to the report, investor interest in silver increased in the first quarter of this year, in part due to expectations that a rate-cutting cycle may be about to begin, which the US Federal Reserve had reiterated following its meeting in March.
According to the Silver Institute, the Fed is expected to convey a broadly dovish stance for 2025 and make three policy rates cut of 25 basis points this year, the first of which is going to happen in the middle of the year, provided inflation continues to decline.
It stated that investing in precious metals should be encouraged in the second half of this year due to the ensuing decline in yields, particularly in real terms.
A high gold-to-silver ratio will also "attract some investors who view silver as undervalued over the long term, perhaps also as its strong fundamentals gain attention," according to the silver outlook for 2024, despite the recent decline.
However, the extent of silver's recovery "may be restrained by a weak Chinese property sector," the report said.
Investment Demand
TD Securities sees solid potential for silver in 2024 as the Federal Reserve starts to cut rates as recession conditions begin to bite. They forecast silver will set its sights towards $26/oz in the final days of 2023. Despite the near-term challenges, the firm forecast silver's long-term potential remains bullish. They added that there isn't enough mine supply for silver to meet the long-term demand trends.
Industrial Demand
According to the BaC, India has been the bright spot in the world market for silver demand in 2023, buying record amounts of the precious metal over the summer. This showed, among other things, pent-up demand, particularly for jewellery after COVID, which was then made worse by restocking along the whole supply chain. Nevertheless, imports have recently resumed their longer-term ranges.
Mine supply
Peter Krauth of Silver Stock Investor said that issues in top producers Mexico and Peru will put a dent in output in 2024: "The world's two largest silver-supplying countries are seeing multi-year lows in supply, and the prospects for new silver mines to come on stream — to be discovered, approved, financed, built and come onstream — we're talking 10 to 15 years these days".
Green Demand
Un their latest silver forecast 2024, Oanda's analysts said that silver might see its biggest deficit in over a decade as mining production cannot keep up with demand. The solar industry has seen surging demand.
Silver Price Forecast 2024 - Technical Outlook: Key ceiling is at $28.75-$30.00
XAG/USD climbed during the first quarter, even outperforming the gold's impressive surge as mentioned in the beginning of this silver forecast and price prediction. Silver has arrived at the gates of an important resistance near the 10-year high at $30 threshold following the recent rally, an area where bullish advances were repeatedly halted in 2021, as seen in the weekly chart below.
Drawing from such chart patterns and technical analysis theories based on historical data, there's a high likelihood that XAG/USD may encounter rejection once more at this technical ceiling, where seller activity seems concentrated. However, should a breakout unfold, there's scope for a move towards new territories. The key resistance stands at $28.75, the peak of May 2021, while $30 is the psychological barrier.
Alternatively, if the bearish scenario plays out and silver gets knocked back down from its current high levels, cluster support spans around the $26 level. Here, the previous resistance levels from 2022 and 2023 aligns with the 50% Fibonacci retracement of the upward movement witnessed from 2020 to 2021. Below this floor, long-term trendline support at $22.00 emerges as the key focus, and of course, the 200-days or 50-weeks moving average.
Silver Forecast and Price Predictions 2024
Global experts at Silver Institute are predicting silver may hit a high of US$48 this year, as its market also reacts to geopolitical issues and a year featuring several significant elections.
They forecast that global silver demand will reach 1.2 billion ounces in 2024, the second-highest level recorded.
Citigroup forecasted silver could hit $30 per ounce highs over the end of 2023 to the second half of 2024, with imminent support seen from buyers eyeing value in the metal after its sharpest price slide in a month (May) since February,
They predicted silver would rally in anticipation of the fall in U.S. interest rates and real yields that will likely accompany an anticipated rollover in U.S. growth in Q4’23 or early 2024. This should weigh on the dollar, with economists expecting U.S. rates and the dollar to weaken further (DXY to 96).
Commerzbank forecasts silver rising to $30 by the end of 2024. They note that adverse factors such as high-interest rates and weaker investment demand will fade in 2024 and that strong industrial demand will boost prices.
The World Bank commodity price index is expected to fall 4 percent in 2024, following a decline of over 20% in 2023. In line with this, silver prices are forecast to decline by 4% in 2024.
Bank of America was more bullish, expecting the precious metal to rise to US$23 in 2023. Forecast Silver prices will see steady support from EV, solar in 2024, and could and could also get a boost from a potential rebound in industrial demand.
Investingheaven.com updated its silver forecast and price prediction: "The price of silver will move to our first bullish target in 2024 which is $34.70". They predict silver to hit $48 either by mid-2024 or mid-2025. Silver is forecasted to be higher in 2024 because the topping pattern in Yields is confirmed. The US Dollar has already confirmed its inability to move much higher.
JP Morgan experts released their forecasts for 2024 which highlight gold and silver as their top metals for the year. The bank is forecasting silver to break the $30 mark any time soon, driven by the Federal Reserve cutting interest rates and falling US yields.
ANZ Research’s Daniel Hynes and Soni Kumari said that Silver will largely follow gold, while strong industrial and investment demand will push prices above USD25/oz in 2024.
While analysts are typically cautious in issuing long-term forecasts for commodities, algorithm-based forecasting services regularly provide price outlooks for more extended periods.
According to Trading Economics global macro models and analysts' expectations, “silver is forecasted to trade at $29.18 per troy ounce by the end of this quarter”. The website forecasted silver to trade at $30.97 in 12 months’ time, or by April 2024.
Gov Capital, another algorithm-based forecasting service, issued a silver price prediction stating that the metal would close out 20234 at a potential price of $27. The platform sees silver rising to $40 by the end of December 2025, $58 by the end of 2026, and $122 during 2029. This is one of the most bullish Silver price prediction for the next 5 years.
Wallet Investor’s silver price forecast for 20234 was neutral. The website saw the precious metal closing in 2024 at the $27 mark. The platform’s silver price forecast for 2025 saw silver trading within the 26.00-28.00 range, while its silver price forecast for the next 5 years has the commodity breaching the $28 price point.
In his book, “The Great Silver Bull,” Peter Krauth derived a valuation of $300 silver through technical analysis. Krauth has a model that forecasts that gold’s price will rise to $5,000 by 2030, which would drag silver’s price up to $300. This is due to gold’s use as an inflation hedge.
“My thesis is that if you look at what’s happening with inflation, and if you look at how other assets are hurting,” he said.
Here are some other 2023 Silver forecasts we have gathered from numerous analysts both inside and outside of the silver industry.
Avi Gilburt
“Long-term, I'm looking for silver to hit $50, but that might take a few years. Prices could easily double in 2023 and the first half of 2024.”
David Morgan
“Silver tends to outperform 3:1 in bull markets. Once silver eclipses $30-50, the next move could soar to $70-$100.”
Randy Smallwood
Gold will shoot up first and then you will see silver take off rapidly. And silver always outperforms. A $50 mark for silver is possible after gold moves through $2,200.
You can see that while many are moderate to strongly bullish, there is some disparity among the silver price predictions for 2024.
When considering silver price predictions, it’s important to remember that high market volatility makes it difficult to give long-term estimates. As such, analysts and algorithm-based platforms can and do get their predictions wrong.
Always do your own research before making an investment decision. And never trade or invest more than you can afford to lose.
Leading indicators supporting the silver forecast & price predictions
Lots of things can impact the silver price—the economy, the US dollar, and inflation expectations, among others—but historically these are the most influential drivers to look at when forecasting the price of silver.
- The price of gold (positively correlated to silver).
- The Euro (inversely correlated to the USD).
- Interest rate expectations (inversely correlated to silver).
- The futures market positioning (CoT).
Experts believe that all leading indicators will turn bullish for 2024 and support the optimistic silver forecast and price predictions, the only one that needs confirmation is 10-Year-Yields: if prices of Treasuries move a little higher, Yields a little lower, it will open the door for silver to finally take off.
Gold Price & Gold/Silver Ratio
Gold is forecasted to eventually move higher in 2024. We gave much more detail about the expected path of gold in 2024 in our gold forecast.
The gold/silver ratio is simply the price of gold divided by the price of silver. Since both are considered monetary metals, they usually move together—which can give us clues when the ratio gets stretched in one direction or the other.
The higher the ratio the more undervalued silver tends to be relative to gold; the lower the ratio the more overvalued silver is to gold.
And when readings get stretched, they tend to correct themselves, as this chart shows… notice the ratio roughly corresponds to the highs and lows in precious metals cycles.
The historical evidence suggests that the gold-to-silver ratio entering the 80 to 100x range may act as a signal for a significant rally in the price of silver. At this very point in time, the gold-to-silver ratio chart has been above 80x since early 2022.
The gold-to-silver ratio is not a timing indicator, it is a stretch indicator. It suggests that silver is extremely undervalued relative to gold, it suggests that it’s a matter of time until spot silver starts reacting to the upside or gold to the downside.
GoldSilver.com also expects to see the gold/silver ratio drop below 20. “The day that people rush back to gold and silver as monetary assets is the day you’ll see the ratio revert back to its 1980 low of 14, giving you enormous leverage to gold.”
The gold/silver ratio suggests the silver price is likely to rise in 2024 according to market watchers and supports the bullish silver price predictions for the next 5 years..
Interest Rates Expectations
Silver is both an investment and is consumed in the manufacture of jewelry, electronics, and electric vehicles, as well as solar panels which have been gaining traction amid the global green energy transition.
However, silver prices, at $23-25 per troy ounce, are down a few percent in 2023 as elevated global interest rates discourage investment in precious metals, which do not offer interest.
Once the peak of Fed tightening and other major central banks (EU, UK) are confidently in place, silver should become attractive again from the investment perspective.
Eur/Usd
Precious metals need a rising Euro (falling or flat USD) in order to shine. EUR/USD should continue moving higher in 2023, according to market strategists, and support the precious metals. We gave much more detail about the expected path of EurUsd in our Euro to Dollar forecast for 2024.
According to FX strategiests, EUR/USD is fairly valued down at these lowly levels. In other words, there is not the kind of extreme undervaluation that has supported EUR/USD at these levels in the past. This really does build the case that if there is to be a EUR/USD rally, it will have to be driven by the dollar leg. Away from the Fed easing story there is also the risk of US fiscal deterioration and de-dollarisation – perhaps both slow-burn stories.
The EUR/USD is forecasted to advance as high as 1.15 during 2024.
Futures market (CoT)
This is another leading indicator for silver. The way to think of this leading indicator for silver is a stretch indicator:
When net positions in the futures market of commercials and non-commercials are stretched it indicates that the price is going to take a turn.
This is not a timing indicator, we need the silver price chart to determine the timing of a turning point.
Silver’s COT report clearly shows that is has very bullish readings. What this really means is that the outlook for price is bullish because the most important influencing factor of price (COMEX positioning) is bullish.
Ted Butler, an expert in reading the CoT report in silver said: The silver CoT report remains unusually bullish, especially given the surge in price during October and November 2023. While a pullback is very likely, the more important thing is that the CoT as a stretch indicator does not indicate that the silver price rally is stretched, on the contrary.
Silver Price History
The silver markets have climbed from the $12 per ounce lows reached at the start of the Covid-19 pandemic, as investors have bought physical precious metals and financial instruments as safe-haven assets during ongoing economic uncertainty.
The silver price reached a $28 high in August 2020 and ended the year around the $22 mark.
The price then jumped to an eight-year high in February 2021, briefly touching the $30 per ounce psychological level, as the market attracted the attention of retail investors.
In addition to investor sentiment, the silver price trend has found support from its growing use in industrial settings, which account for roughly half the metal’s annual demand.
Physical silver demand climbed to a record high in 2021, led by an all-time high in industrial applications – silver is the best conductor of electricity, so is often used in high-end applications.
The silver spot price had fallen from $24 to $23 per ounce since the start of the year, as central banks combatted inflation by rapidly raising interest rates. Higher interest rates tend to be bearish for precious metals, as investors opt for interest-bearing savings accounts and other assets that generate guaranteed returns.
Silver traded up from $22.30 per ounce in late January to $26.90 per ounce in early March, a peak so far this year, as the market responded to the Russian invasion of Ukraine. But while the market traded between $24 to $26 until mid-April, it began to sell off sharply later in the month as the dollar strengthened.
The price bounced back to $21.867 in the following two days but then went on the decline, closely following the trajectory of the gold price.
The metal attempted to rebound in late July, trading above the $20 mark for several weeks, before shedding close to $2 from its value in 10 days on the back of further interest rate hike expectations – in the current climate, the Fed’s pledge to curb inflation is leading investors to favour the dollar instead of non-interest-bearing bullion assets.
November saw the Fed make its fourth consecutive 75bps rate hike, taking its short-term borrowing rate to a target range of 3.75%-4% – the highest level since January 2008 – as it continues its mission to return the US economy to 2% inflation.
The precious metal saw an outstanding few weeks towards the end of 2022, with a weekly gain of about 4.7% and a monthly gain of about 14.4%. This has largely been due to speculation about China loosening its current zero-Covid policy, even though official statements have denied this so far.
The continuous futures contract for silver ended 2022 at $23.97 per ounce, up 3.7%.
The price advanced up to $26 in the first half of 2023 amid geopolitical risks, before pulling back to the $23 levels
Silver prices and precious metals in general have been weighed by elevated real yields amid the growing view that interest rates will remain higher for longer given stubbornly high inflation. Rising nominal interest rates coupled with easing price pressures/inflation expectations have pushed up real rates, raising the opportunity cost of holding the zero-yielding yellow metal.
History of Silver
Evidence of the first silver mines dates to 3000 B.C. in Anatolia, a site in modern-day Turkey. Most of the silver mining in that part of the world shifted east to Greece by 1200 B.C., as that civilization expanded. In 100 A.D., Spanish silver mines fed the Roman Empire's economy.
Silver's popularity increased in the years 1000 to 1500, thanks to improved technology, more mines, and better production techniques. The quest for silver and other precious metals gave rise to Spanish fleets that sailed all over the world, seeking wealth and new lands to conquer. It was a vital part of the mercantile system.
Silver production in the United States peaked in the 1870s with the Comstock Lode in Nevada, and by the end of the 19th century, humans produced more than 120 million troy ounces every year. One of the most iconic ways humans used silver was as a form of currency.
In the early 1960s, supplies of silver in the United States dwindled to all-time lows. Therefore, the U.S. government decided to stop using silver in its coins after 1964. Any American dimes, quarters, half dollars, or dollar coins with a date of 1964 or earlier contain 90% silver. If the price of silver is $20 per ounce, these silver coins are worth approximately 14 times their face value in the precious metal content alone. A silver dime is worth $1.40, whereas a silver dollar is worth $14 at a $20-per-ounce price.
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Sources:
- https://www.silverinstitute.org/wp-content/uploads/2024/04/World-Silver-Survey-2024.pdf
- https://www.jpmorgan.com/insights/global-research/outlook/market-outlook
- https://investinghaven.com/forecasts/silver-price-forecast-2024/