Precious metals, like silver, have long been regarded as a safe-harbor investment. Because it is a tangible asset that has intrinsic value, silver tends to hold its value amidst fluctuating markets. Silver can be counted on to steadily rise over time, so it’s undoubtedly a strong long-term investment.
However, experts in the field have speculated that silver prices could climb as high as $100 an ounce. This is primarily because silver production has declined over the past several years while demand continues to rise.
According to Keith Neumeyer, CEO of mining company First Majestic Silver, “We’re consuming, as a human race, over 1 billion ounces of silver annually, and miners are only producing about 800 million ounces a year, and that’s been dropping for three consecutive years.”
Due to its use in many everyday electronics, computers, and solar panels, Neumayer believes investors should view silver as a “strategic” metal for investors. He anticipates that its value will rise significantly in the coming years.
What Can Impact The Price Of Silver?
What factors impact the price of silver, and what could possibly cause its cost per ounce to rise more than 300%? Silver prices are shaped by a combination of factors, including investment, inflation, the strength of the dollar, how gold is performing in the market, consumer demand, and industrial demand to name a few.
Investment & Speculation
When there is an uptick in investor interest and an increase in the demand for any commodity or asset, it causes prices to rise. However, in the case of a natural resource like silver, this can also lead to increased production. This, in turn, increases the global supply, which causes prices to fall.
Inflation
Silver has often been lauded as an excellent hedge investment against inflation. Even if inflation is low, the purchasing power of paper currency will be eroded over time. Like other precious metals, silver’s value tends to rise with inflation, protecting against such losses in purchasing power.
Strength Of The Dollar
Historically, the US Dollar has an inverse relationship to the price of silver, so generally, when the dollar is down, the price of silver will go up. However, the U.S. Dollar is also the base currency for silver, so if the dollar weakens, silver becomes cheaper to purchase, which will drive up the cost of the metal.
Gold Prices
Unsurprisingly, silver has historically followed gold’s price trends, as many of the same factors shape their value. However, because silver has many technological and industrial applications that gold doesn’t, some experts believe silver’s relationship with gold could change in the coming years.
Consumer Demand
The supply of silver is limited, but consumer demand is constant. That said, when there is a perceived supply or demand shift, the price shift is usually disproportionate to the change itself. For example, a perceived disruption in the silver supply may cause prices to spike temporarily.
In prosperous times, people often spend money on jewelry and items that contain precious metals like silver. Conversely, if the economy stagnates or drops, such purchases are often the first to be sold, flooding the marketplace.
The growth of emerging markets can be a significant indicator of this area of demand.
Industrial Demand
Silver is one of the most versatile elements on the planet. It has the highest electrical conductivity of any element and the highest thermal conductivity of any metal. For these reasons, it has many industrial uses, and in some cases, it is virtually irreplaceable.
Silver has also long been used in film photography and is a component in various electronic devices like switches, superconductors, and circuit boards. Silver ions and compounds can kill bacteria, algae, and fungi, so it is used in the filtration and purification of water.
Silver also has many applications in green technologies, such as solar panels. With the technological uses of silver expanding yearly, this bodes well for the rise of silver prices in the coming years.
Different Ways To Estimate The Price Of Silver
When predicting the future prices of any asset, it makes sense to look at its behavior in the recent past and to look to other correlated trends for clues.
Silver has been on a wild ride since the last recession. Prices peaked at almost $50 an ounce in 2011, then hit a low of $14 an ounce at the beginning of the Covid 19 pandemic. Since then, it has rebounded by more than 45%, to over $20 an ounce.
These fluctuations were caused by several factors such as monetary policy, geopolitical concerns, the value of the US dollar, physical demand, and mining production that we can use to predict how silver will perform in the coming years.
U.S. Money Supply
Because in global commodity markets, silver and gold are usually bought with U.S. Dollars, causing an inverse correlation. If the dollar weakens, metal prices generally increase, and conversely, silver is historically available for lower prices if the dollar is strong.
Silver Price Moving Averages
A moving average captures price data from a specific period of time and can indicate whether prices are trending upward (bullish) or downward (bearish). At this current time, silver averages are trending downward. When prices are low on a “safe-haven” investment, it may be a good time to get bargains on silver investments.
Gold-Silver Ratio (GSR)
The Gold-Silver Ratio, or GSR, represents the number of ounces of silver it would take to purchase one ounce of gold. In the 20th century, the average GSR was 47:1, and the average of the past 20 years was 60:1. The current GSR is 79:1, which represents a historical high.
What’s In Store For The Price Of Silver?
Compared to the price of Gold, silver’s price has been comparatively low in recent years. According to some experts, this represents a severe undervaluing of the precious metal, and the market is due for a correction in the next decade.
Silver Price Prediction for 2022
Silver is currently in a slightly bearish trend, though it’s way up from the pandemic low of $14 an oz. Between now and 2023 will probably be ideal for silver investment purchases, especially if prices follow predicted market trends.
Silver Price Prediction for 2023
Some outlets predict that silver will continue its slight bearish trend into 2023, making the next 12 months an excellent time to invest in silver. Other analysts expect an increase in silver prices up to $40 an ounce in 2023. Essentially, a sharp upward rise may be possible, but a crash-level dip is unlikely.
Silver Price Prediction for 2030
Because of its applications in green technology, such as solar panels and electric cars, most experts agree that silver demand will continue to soar in the next decade. By 2030, the amount of silver used to manufacture electric vehicles alone will rise by a predicted 70 million ounces per year. It’s predicted that Silver could cost over $100 an ounce by 2030.
Could Silver Hit $100 Per Ounce?
Based on its current trading price of just under $22, Silver’s value would have to increase by over 350% to reach $100 per ounce. While exponential growth like this has not been the trend in most markets in the past few years, there is certainly precedent to suggest it is possible.
During a silver bull run in the 1970s, silver went from $1.70 an ounce to nearly $50 an ounce. That is almost 3,000% move in less than a decade. During the bull run of the 2000s, silver moved from a low of $5 an ounce to $30 an ounce, which is a 600% increase.
Silver is usually applauded for its safety as a long-term investment, but it’s not really known for runaway growth. However, the past has shown us that Silver can be among the best performers on a bull run.
Another way that silver prices could rise exponentially is if there were a hyperinflationary collapse. If the U.S. dollar were to collapse, the price of silver could rise to an infinite price in dollar terms. That is to say if the dollar were to lose all of its purchasing power. During a hyperinflationary collapse, you would have to value silver in terms of what it could be used to buy.
Invest In Silver With Noble Gold Investments
Physical assets, like gold and silver, have survived an unknowable amount of financial storms throughout history and retained their value. Silver is rightly viewed as a safe-haven asset for investors during times of economic uncertainty, like the current market.
However, at this time, Silver might not just be a safe investment but a high-yield one. Certain factors have convinced market experts that silver prices will be on the rise, perhaps exponentially, by the end of 2023.
As more and more nations are switching to green technology and more consumers choose to drive electric cars, demand is skyrocketing.
This increased demand, coupled with declining production over the past several years, indicates that the current undervaluing of silver won’t last much longer.
With Silver prices hovering just above $20 an ounce and the GRS at a historical low point, it is looking to be a very advantageous time to invest in Silver holdings.
Noble Gold Investments offers a secure and convenient way to buy physical silver bars and silver coins or to invest for retirement with a silver IRA. Our account managers will help you every step of the way, from signing up for an account to funding your investment. Our team can even guide you on investment decisions and hedge opportunities. Don’t hesitate to call us today at (877) 646-5347.
