Silver long term forecast

Silver long term forecast

In the chart above a parabolic curve is used to visualize how Silver's price rise could accelerate as the current secular bull market unfolds.

Based on this chart our Silver price prediction 2025 is $120 per ounce.

Continue reading the article below...

Silver price projections next 10 years

There are several ways of predicting Silver prices:

In this short article we'll look at the parabolic curve shown in the chart in order to make Silver price projections for the next 10 years

Let's start by making some major assumptions that could be entirely wrong (how's that for a caveat?)

We'll list those assumptions so we can refer to them in the future

If we accept those assumptions as our operating premise we can then develop a trading and Investment strategy for Silver

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 Letters

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 the 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 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 a potentially epic rise in Precious metals prices 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 Precious metals bull market

Rest in peace, Richard - and thank you!

Silver bull Market strategy

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

As traders and Investors we want to identify when that third phase starts so we can participate in the silver bull Market

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

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

Now a $480 or $1350 long-term price 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, the price of 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:

So Richard watched a 10 year bull Market 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 the Precious metals bull Market will last at least ten years since phase-one (2001-2011) lasted ten years and Richard was expecting a multi-phase movement

Gold Silver ratio chart

The Gold Silver ratio chart shows us when Silver is cheap relative to Gold and vice-versa.

At its current level of approximately 80 the ratio suggests that Investment in Silver is favored over Investment in Gold.

The Gold Silver ratio (GSR) helps us make Silver price predictions because we can start with the price of Gold and then adjust the GSR to a target level that we determine based on historic precedent or other factors.

Historically the GSR has been in the 12 to 15 range in the civilizations that used both Silver and Gold as money. [interesting aside: every human civilization throughout recorded history has used Silver as money at some point]

Geologists tell us that there is 17 to 19 times more Silver in the Ground than Gold.

Because of the logistics and economics of Precious metals mining only 8 or 9 ounces of Silver are mined for every ounce of Gold mined.

Let's throw these numbers into a table for comparison.

Using these values we could make a case for a Gold Silver ratio anywhere between 8 and 19.

The strongest precedent we have for picking a particular GSR value is the example set at the end of the secular Precious metals bull market that ended in January 1980.

At that time Silver reached $50 per ounce and Gold hit $850 which pushed the GSR down to 15.

I am assuming that the Gold Silver ratio will reach the 15 level again before the current bull market has run its course.

In my analysis of potential Silver prices I will use a GSR of 15 as my expected target while acknowledging that a ratio as low as 8 is within the realm of possibility.

Using the current price of Gold ($1866 on 02/14/22) we get the following prices for Silver based on the target GSR of 15 and 8.

While this method of Silver price prediction doesn’t give us any specific target dates, it does provide support for the idea that the price of Silver will be measured in the hundreds of dollars per ounce within the next 10 years (length of a secular bull market as discussed above).

Fibonacci extension

The Fibonacci extension tool can be useful for making a Silver price forecast. In this Silver price chart the Technical analysis tool suggests targets at $39.88 and $51.15.

Descriptions of how to use Fibonacci extension are easy to find online but these simple ‘how to’ guides tend to leave out this key piece of information: when is it appropriate to apply this predictive tool?

Because this article is about the future price of Silver and not Technical analysis, we will cut to the chase.

Here’s the secret to using Fibonacci extension with a high degree of accuracy: only apply the tool to impulsive price movements.

In our Silver price chart we have highlighted a five-month period of impulsive price movement. We can classify this move as impulsive based on these factors:

1.Five-month rally with no pullbacks
2.Several wide-ranging price bars
3.A Doji candlestick
4.A price bar where price closes at high of bar

All of these price behaviors are indicative of elevated energy and, collectively, they support the idea that the five-month price movement was impulsive.

Because we are applying the Fibonacci extension tool to an impulsive price movement, we can predict with a high degree of probability that the 1-to-1 Silver price target at $39.88 will be reached, it is only a matter of time.

Given Silver’s tendency to make dramatic moves (like the five-month rally) it would not be surprising to see the 1-to-1 Fibonacci target surpassed as excited investors surge into Silver chasing momentum and fearing that they have missed out.

 In that case price would likely surpass the 1-to-1 target and rise to test the $50 round-number and the 1.618 Fibonacci target at $51.15.

Fibonacci extension is another Silver price prediction method that gives us price targets but no specific time for reaching those levels. To determine target dates in our current example let’s assume (for no particular reason) that the price targets predicted by Fibonacci extension are only valid for two years.

The five-month price rally ended in August 2020 so a two-year window suggests that by August 2022 the price of Silver will either

1.invalidate the Fibonacci extension prediction by falling decisively below $21.66, or
2.demonstrate that the prediction is still accurate by rising decisively above the 0.382 Fibonacci level at $28.62.

Let’s assume our prediction is valid and arbitrarily pick these target price levels and dates based on the Fibonacci extension analysis:

Footnotes: