Silver Price Forecast: Short- & Long-Term Silver Price Prediction • Benzinga (2024)

Silver has been a coveted commodity and currency for millennia, going back at least as far as the ancient Greeks. Its shine, rarity and general allure made it popular to make currency and jewelry. More recently, silver has found an even more important role in industry, and now half of its supply goes directly to manufacturers.

As an investor, it is important to understand the factors that affect the prices of the assets you are trading. These factors can be combined to build an educated price forecast that likely won't be perfect but will be helpful. This article dives deep into short-, medium- and long-term silver price forecasts from experts and analysts and the factors they used to create them.

Silver Price History

Silver has a fascinating price history decided by a wide range of different factors including political decisions, industrial use and changes in supply. The metal's history is an important foundation. The price of silver and gold didn't change much between the 1930s and 1970s because of a controversial executive order from Franklin Delano Roosevelt.

The initial order, put in place in 1933, forced Americans to sell their personal gold to the Fed. In 1939, Roosevelt doubled down on the order and made hoarding gold or silver illegal and punishable by up to a $10,000 fine, 10 years in jail or both. The order lasted longer than the gold standard and was only repealed in 1974, setting the price of gold and silver free.

The order didn't set a price for silver as it did for gold ($35 per oz) but it did impact the price of silver through the 70s. Silver didn't break $2 until 1969 and only reached $6 10 years later.

The 70s were a particularly volatile time for gold and silver, partially because of the repealed executive order. World politics was another massive factor that made gold and silver spike to unheard-of levels. In 1980, two geopolitical crises were dominating the news: the Soviet Union invading Afghanistan and the U.S. hostage crisis in Iran.

By the end of January 1980, gold rose 3x to $677.97, and silver reached $35.75 (a 500% annual increase). After the geopolitical crises cooled, the price of both metals fell precipitously. The next massive move came in 2001, just after the dot-com bubble burst, pushing gold and silver to all-time highs. Gold and silver began to fall once the markets cooled, and both metals spiked in 2019 and 2020.

What Affects the Price of Silver?

The price of silver is largely determined by supply and demand, just like most other goods and investments. However, the factors that affect silver's supply and demand are different from other investments, including gold. For example, silver is usually mined as a byproduct of mining other metals, which makes it difficult for mining companies to meet increasing demand.

Gold has quite a few uses in manufacturing, and 11% of its supply goes towards industry, but silver is dominated by manufacturing. About half of the annual supply of silver is used in manufacturing whereas gold is mostly used as a safe-haven asset or investment.

Most of the applications of silver, like electronics, DVDs, glass coatings and nanotechnology, only require a small amount of silver, but it adds up quickly. Because so much of the demand for silver comes from manufacturing, its price should theoretically increase when manufacturing is booming. However, silver is still also seen as a safe haven investment and holds a strong correlation with the price of gold.

Other factors like rising interest rates, increasing inflation and stagflation can affect the price of silver. Silver's price may be highest when manufacturing is performing well despite other issues in the economy that would further drive investors to safe-haven investments like silver.

Silver Short-Term Price Forecast

It can be difficult to put together a useful silver price forecast, especially for the short term. Too many factors influence the price. Expert analysts often look at indicators like current market conditions, geopolitical issues, technical analysis, macroeconomic models and the demand for silver to try to make a prediction.

WalletInvestor, an AI-assisted technical analysis platform that creates informed price predictions on multiple kinds of assets, including precious metals like silver. WalletInvestor's AI predictors say that silver will be trading at about $24.95 by the end of 2023. These price forecasts can be useful as estimates or guesses, but they should be taken with a grain of salt.

Silver Medium-Term Price Forecast

The experts at Trading Economics forecast that the price of silver will be about $20.21 per oz by February 2024. They expect that silver will mostly stay stable around its current price. Other analysts have given similar silver price predictions. Price predictions struggle less with accuracy in the medium term, but keep an eye on the factors that can affect the price of silver.

Silver Long-Term Price Forecast

Most investors agree that the future of silver is bright in the long term. Some, like Avi Gilburt, the expert trader and founder of ElliotWaveTrader, believe that it will double in 2023 before reaching $50 within the next few years. Wells Fargo expects silver to play a major role in the future and hinted that it may perform better than gold.

It seems likely that silver may perform well in the long run because of its vital place in manufacturing. Many of the applications of silver in manufacturing are the innovative technologies that are driving the future, like batteries, solar power and electronics. It's hard to imagine these applications won't continue to grow quickly, increasing the industry's demand for silver.

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Diversifying into Silver

Silver and other precious metals are valuable hedges against inflation that can thrive during economic uncertainty. The manufacturing industry generates a large percentage of silver's overall demand. The asset can benefit many investors and serve as additional diversification. Investors should consider their financial goals and risk tolerance before investing in silver.

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