Silver’s Long-Term Forecast is Bright and Shiny

SWAG: "scientific wild-assed guess"

The pink curve in this monthly chart of Silver is not based on any math or analysis - I just added the curve drawing tool to the chart and started moving it around

To keep the curve from going parabolic (straight up) before 2030, I pushed $50 and $70 further into the future than I actually expect those targets to be reached

 

Silver Price Forecast Long Term

There are several ways of predicting prices:

  • parabolic movement
  • Fibonacci trend extension
  • ratio of one asset's price to another asset's price (i.e., the Silver-to-Gold ratio, or SGR)
  • Elliott Waves
  • price gain as a percentage

We are going to explore all of these techniques in a series of articles focussed on Silver and Gold

Once we have the results from all the methods we'll compare what we have found and draw some conclusions

Today we are going to make some major assumptions that could be entirely wrong (how's that for a caveat?)

Let's list those assumptions so we can refer to them in the future:

  • Gold is in a secular bull market
  • Every bull market has three distinct phases
  • The third phase of a bull is characterized by euphoria/mania - prices tend to reach levels that surprise even the staunchest of bulls
  • The third phase of Gold's secular bull market has yet to occur
  • Silver prices are correlated to Gold prices - higher Gold means higher Silver

 

Wow! Those are some major assumptions!

 

If we accept those assumptions as our operating premise we can then develop a trading/investing strategy appropriate for our theory

And let's agree that having any theory is better than no theory - if we are wrong, we can step-back and adjust - if we are right, we make money

Without having some framework to use when we approach the financial markets, we are really just hoping for the best with no actual strategy to apply

 

Richard Russell - Dow Theory Expert

I learned a great deal from the late Richard Russell and his Dow Theory Newsletters

Richard talked about Gold's secular bull market quite a bit and he emphasized the same points I made above as assumptions

Specifically, that Gold was in a secular (as opposed to cyclical) Bull Market and that ALL Bull Markets have three distinct phases

Additionally, that prices in the third phase of a Bull Market tend to reach levels that surprise even the staunchest of Bulls

And finally, that the third phase of Gold's Bull Market had yet to occur 

Richard stated that final point over-and-over - it was very clear to him that the most exciting phase of the Golden Bull's run had yet to occur, and he wanted his subscribers to benefit 

Richard passed in November of 2015 so he won't get to witness Gold's epic price rise in coming years

Those of us who followed Richard and considered him a mentor have an opportunity to benefit from his wisdom by participating in the Golden Bull market

Rest in peace, Richard - and thank you!

 

Our Battle Plan for the Silver Bull Market

OK, so now we have a context to operate from: Gold is in a secular bull market and its third, and potentially most profitable phase has yet to occur

As traders/investors we want to identify when that third phase starts so we can be aboard

We also want to have long-term price forecasts for Silver and Gold so we know when it is time to take profits

Using the parabolic curve in the chart, we get these targets for Silver:

 

Date Silver Price Forecast Long Term (USD)
May 2023 $50
May 2024 $70
May 2025 $120
May 2026 $230
May 2027 $480
May 2028 $1350

 

$1350 for an ounce of Silver! You must be crazy!

 

Now a $480 or $1350 long-term forecast for an ounce of Silver seems ridiculous - trust me, I recognize that fact

Remember, however, Richard Russell's guidance: in the third phase of a bull market, prices tend to reach levels that surprise even the staunchest of Bulls

I consider myself to be one of those staunch Bulls and my long-term forecast for Silver is $600 per ounce

For me to be surprised, as Richard suggests, Silver will have to go a lot higher than $600

 

Duration of Secular Trends in Financial Markets

There is no hard-and-fast rule for defining a secular trend - if you look for a specific number you'll find anything from 5 to 30 years

Let's think about how Richard used the term, since his definition is most relevant for our current exercise in making price forecasts for Silver in the year 2030

Richard watched and analyzed the financial markets on a daily basis for over 50 years and he saw numerous bull markets play out in that time

When he says that the Bull always runs in three distinct phases, I'm going to believe him - he certainly knows better than I, based on his experience

Let's list some facts as bullet-points and then we can tie them together:

  • Richard believed the Golden Bull market would occur in three phases
  • He witnessed the first phase of the Bull from 2001 to 2011 and made sure his subscribers benefited 
  • AFTER 2011, Richard continued to write about the three-phase bull market in precious metals and how the third phase was yet to come - he was adamant on this point

 

So Richard watched a 10 year Bull Market in Gold and Silver and continued to talk about a three-phase movement that was currently unfolding

Clearly, in his mind, the duration of a "secular trend" was measured in decades

At this point, we can add to our operating theory that the third-phase of Gold's Bull Market will last at least ten years since phase-one (2001-2011) lasted ten years and Richard was expecting a multi-phase movement

 

Wrapup

We'll be exploring Elliott Wave theory and Fibonacci relationships in coming articles

Ultimately we will develop long-term price forecasts for Silver and Gold covering the next 10+ years

Stay tuned, it should be fun