The silver price exceeded $30 per Ounce for the first time in 11 years between May 17, 2024 and May 31, 2024. How much higher can silver rise? The answer: much higher in the long term, not much higher than $30 in the short term. Here’s why.
READ – Silver is officially in a new secular uptrend
Here’s what we wrote on February 11, 2024, when this article was originally published:
A silver price of $30 per Ounce seems like a very conservative silver price target, given the silver supply shortage, the bullish secular silver chart, and the undervaluation of silver relative to gold.
This silver prediction for 2024 came true in May 2024.
September 7, 2024 – At the time of updating this article, it is clear that silver will need more time to clear $30 per Ounce. This does not concern the $30 – $32 area is just so powerful that it needs to be tested several times before being cleared. It’s classic graph dynamics.
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What’s next for the price of silver is the million dollar question: will silver surpass $30 per Ounce, if so, when exactly?
Tip: the graphs indicate early 2025 (more on this). silver timeline analysis)!
Research into supply and demand of silver
The Silver Institute has released its latest physical silver market reportearly February 2024.
In summary, while silver demand is expected to remain robust, supply is expected to increase slightly, leading to a physical shortage in the silver market.
- Demand forecastingGlobal demand for silver is expected to reach 1.2 billion ounces by 2024 second highest level ever measured. This growth is driven by stronger industrial offtake and is expected to reach a new annual high, driven by increased industrial end-uses and a recovery in jewelry and silverware demand.
- Industrial manufacturingIndustrial production of silver is expected to rise 4 percent in 2024, reaching a record 690 million ounces. Key drivers include the photovoltaic and automotive industries, with technological advances contributing to higher silver offtake.
- Ask about jewelry and silverware: Jewelry demand is expected to increase by 6 percent, driven by growth in India. A recovery in jewelry consumption and normalization of demand is expected, along with a 9 percent increase in silverware production.
- Silver investment projectionsPhysical silver investments are expected to decline by 6 percent, with economic growth and gains in the U.S. stock market reducing investor interest.
- Supply forecastingTotal global silver supply is forecast to grow by 3 percent in 2024, reaching an eight-year high of 1.02 billion ounces, driven primarily by a recovery in mining production. Silver recycling is expected to decline, with lower supply of jewelry and silverware accounting for most of the losses.
September 7, 2024 – The latest data on silver demand is in (source):
Demand for silver is increasing, with solar energy alone expected to account for 23% of supply by 2024. However, in 2023, the silver market faced a 15% supply shortage.
Market shortage and investment prospects: The silver market is expected to remain in deficit for the fourth consecutive year. Market expectations of US rate cuts and a stronger US dollar could temporarily impact silver investment, but silver’s positive fundamentals should encourage renewed interest once the Fed starts cutting rates.
Silver price prediction
What is certainly interesting is that The Silver Institute’s report did not mention the word “silver shortage” or a forecast silver price of $30.
We made all these points in our market anomaly analyzes published in the public domain in the silver section:
In one interview However, at CNBC, executive director of The Silver Institute brought up the $30 silver target:
“We think silver will have a great year, especially in terms of demand,” Michael DiRienzo, executive director of the Silver Institute, told CNBC. He expects silver prices to reach $30 an ounce, which would be the highest level in a decade, according to LSEG data.
It is unclear why this $30 The silver price target for 2024 did not appear in the report itself, but was only given in an interview.
More importantly, why ‘only’ $30? Consider the following:
- Most commodities, if not all, exceeded their 2008-2012 peak.
- Silver is the only commodity that didn’t even come close to its 2011 peak.
- At the time of writing, the silver price is more than 50% below the highest level of 2011.
- All this is happening while there is a silver shortage.
Any rational analysis of the silver market, based on the available data points, comes to one and only one conclusion: huge undervaluation.
Silver price chart
Meanwhile, the silver price chart continues to test its 13-year declining trendline.
As shown in the chart below, the silver price has been virtually stable for 3.5 years now.
More importantly, silver is on an upward trend when you look at it from a secular perspective (the last 20 years).
When the 24-26 area is broken to the upside, silver prices will move towards our target of $34.70. Sooner or later, silver is expected to reach $50.
According to the chart, the $30 silver price target given by The Silver Institute makes no sense. There is no reason why the price of silver should stop rising at $30 once it passes $26.
September 7, 2024 – The silver price ‘consolidates’ just below 30 USD per Ounce. We are confident that one of the lower support levels will hold. Why? Because of the detailed silver chart insights shared in our special silver edition report shared on August 10, 2024 in the premium gold and silver research service. In it we explain why exactly and what level of support we expect to maintain, including on what time frame (S).
The silver card that Real business
Moreover, the only chart that really matters is the gold-silver price ratio.
Below you will find the gold-silver ratio over 50 years.
We have mentioned in the past that the secular gold-silver price ratio can act as a ‘stretch indicator’. This ratio seems to indicate that the price of silver is undervalued versus overvalued compared to the price of gold.
Look at the horizontal green line. Every time in history the gold/silver ratio reached 92:1, it pushed the price of silver way up. In some cases it took a few years, in others a few months, for silver to explode.
September 7, 2024 – The gold-silver ratio refused to fall below 75 points in 2024. We believe that it is inevitable that silver will return above USD 30 per Ounce, which will push the gold-silver ratio well below 75 points. However, that will not happen in 2024. We’ve shared specific dates to watch (in our premium silver reports) for when silver could start its next leg higher.
Silver price momentum?
The data points don’t lie: silver is a screaming buy that is severely undervalued. There is a silver supply shortage, a historical undervaluation of silver compared to gold, a secular ascending channel on the silver price chart.
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Against the backdrop of phenomenally bullish data points, we see a lack of momentum in the silver market. Note, however, that this is partially true:
- On the one hand, the silver price is flat. Investors seem very focused on trading AI and robotics stocks. High flyers in AI semi-finals, AI operations and AI technology attract attention. Most, if not all, commodities are simply not part of this current momentum cycle.
- On the other hand, the largest traders who are net shorting the silver COMEX market are holding historically low short positions. This is a prerequisite for developing much higher prices over time.
As noted by Ted Butler, commercials in the silver COMEX market have the ability to prevent the price of silver from rising. The lack of momentum is also, in some ways, a result of silver COMEX trading dynamics.
Conclusion
Based on the available data, we conclude that silver is a screaming buy:
- The gold-silver price ratio over 50 years.
- The shortage of physical silver supply.
- The secular silver price chart shows a long-term rising trend channel. Sooner or later, the secular uptrend will turn the 3.5-year consolidation into a bull run.
The stated silver price target of $30 did not make sense for us as an end goal. The point is this: $30 per Ounce is a price point just above a breakout level, so from a chart perspective it can’t be an “end point” so to speak. Furthermore, given silver’s fundamentals and lagging price action, it has always been clear to us that silver had different price targets:34.70 and $50.00.