Silver price forecast 2025 and beyond: Third party price target
Rising interest rates and a strong dollar pushed silver to a two-year last September, but what lies ahead?
The current outlook for silver indicates signs of a downward correction, amid a Federal Reserve that remains in no rush to lower interest rates and a strengthened U.S. dollar Reuters: Powell says no need for Fed to rush. This combination of factors has raised concerns among investors, particularly following the recent failed attempt to break through the key psychological level of $30.
Silver price forecast for 2025 and beyond
During 2024, silver reached levels not seen in 12 years, approaching $35 per ounce at the beginning of the last quarter. This increase in demand was due to political uncertainty in the United States, with the presidential elections on the horizon, as well as growing geopolitical risks in the Middle East, particularly the possibility of a conflict between Israel and Iran.
As of late October 2024, the price of silver has increased by more than 40%, surpassing gold’s 33% rise, but it is still far from its all-time high of $49.80 reached in 2011. However, technically compared to the rally in 2010, when silver rose by 80%, there is still room for growth, especially if current tensions persist.
Past performance is not a reliable indicator of future results.
Experts like Robert Kiyosaki, author of “Rich Dad, Poor Dad,” have mentioned silver as the “best asset” of the moment, predicting it could reach $50 per ounce due to its industrial demand and appeal as a safe haven Investing in Silver Robert Kiyosaki's Timely Advice - Financial News. The question remains, can it really reach that mark? According to Kiyosaki, silver has significant potential to increase in value, especially in the context of the transition to green energy technologies and current economic uncertainty.
Furthermore, according to the “World Silver Survey 2024” World Silver Survey 2024 - Silver Institute, this precious metal has shown an upward trend driven by growing industrial demand, especially in sectors related to the energy transition, such as solar panels and electric vehicles. These sectors have increased their consumption of silver, creating positive pressure on its price. Although the report does not specify an exact figure, the combination of sustained demand and limited supply suggests that the price of silver could maintain an elevated trajectory in the medium and long term. This scenario highlights the prospects for stability and strength in the silver market as technological and investment uses of the metal increase.
According to Kitco Silver price will move higher in 2025, analysts expect silver prices to reach between $36 and $38 per ounce in 2025. This increase is driven by growing industrial demand and a moderation in the gold/silver ratio. Some analysts are even more optimistic, predicting that silver could reach $50 per ounce in 2025. These forecasts reflect sustained optimism in the market, supported by the increasing adoption of green technologies and strong investment demand.
What are the Silver price drivers?
- Supply and Demand: Silver prices are driven by the balance between supply and demand. Limited supply and high demand raise prices, while oversupply lowers them. Key factors include mining output, recycling rates, and industrial demand.
- Economic Conditions: Silver prices could rise with economic growth due to higher industrial demand and fall during downturns as demand drops.
- Inflation and Currency Value: Silver is considered a hedge against inflation. When inflation increases, the value of paper currency decreases, making silver an attractive investment. Additionally, the strength of the U.S. dollar affects silver prices inversely; a stronger dollar generally leads to lower silver prices.
- Interest Rates: Central bank interest rates could impact silver prices. High rates lower silver prices by attracting investors to interest-bearing assets, while low rates make silver a more appealing investment.
- Geopolitical Tensions: Political instability and geopolitical tensions often lead investors to choose safe-haven assets like silver. Wars, trade disputes, and unrest can boost silver demand and raise its prices
- Market Speculation and Investor Sentiment: Speculation and investor sentiment can cause price fluctuations. Positive sentiment and buying drive prices up, while negative sentiment and selling lead to price drops.
- Technological and Industrial Demand: Silver's unique properties are vital for electronics, solar panels, and medical devices. Technological advances and higher industrial demand can increase silver prices.
- Government Reserves and Central Bank Actions: Government and central bank actions, like trading silver reserves, impact prices. Strategic reserves and monetary policies cause supply and demand fluctuations
- Mining and Production Costs: The cost of mining and producing silver affects its market price. Higher costs raise prices, while technology advancements that reduce costs lower prices.
- Global Events and Pandemics: Global events like pandemics can disrupt supply chains and silver prices. The COVID-19 pandemic, for example, increased silver demand for medical uses and as a safe-haven asset.
Silver price history
Past performance is not a reliable indicator of future results
In this weekly chart since 2010, we can track the key price movements of silver, from its all-time high in 2011 to its subsequent decline, recovery, and recent attempt to break through the 30 USD level.
In 2011, silver reached its all-time high of 49 USD, driven by post-2008 monetary stimulus, inflation fears, speculation, and strong industrial demand. However, the rally quickly collapsed due to profit-taking and increased margin requirements.
From 2011 to 2020, silver experienced a prolonged downtrend as the global economy stabilized. It eventually hit a low of 12 USD in March 2020 during the pandemic-induced market crash.
The period from 2020 to 2021 saw a sharp recovery, with silver rising to nearly 30 USD. This recovery was fueled by massive stimulus, a weaker dollar, and speculative buying, culminating in the "Silver Squeeze" of early 2021.
Since 2021, silver has consolidated, fluctuating between 20 and 27 USD. Recently, it has shown signs of a renewed rally toward the 30 USD level, driven by inflation concerns and growing industrial demand, particularly in green energy applications.
This timeline highlights the volatility of silver prices and their close ties to economic and industrial trends.
Silver trading strategies to consider
Before you start trading CFDs, you should have a clear silver trading strategy in place.
As with any tradable asset, having a strategy helps you make consistent and informed decisions about when to enter or exit a position, reducing emotional biases. Below are four popular strategies that you might consider incorporating into your silver trading approach.
Scalping
Scalping is an ultra-short-term strategy designed to capitalize on sharp price movements within minutes. This approach relies heavily on technical analysis tools to identify precise entry and exit points..
Once technical indicators signal a bullish or bearish trend, scalpers set stop losses at key support levels and define profit targets. The trade is then exited as soon as indicators suggest a potential trend reversal. Scalping requires quick decision-making and a high level of focus, making it ideal for traders comfortable with fast-paced environments.
Day trading
Day trading is a short-term strategy similar to scalping but involves holding positions for hours instead of minutes. Like scalping, this approach relies on technical analysis to determine entry and exit points.
Day traders aim to capture intraday price fluctuations while avoiding overnight market risks. This strategy suits traders looking for a balance between rapid trades and slightly longer-term market analysis.
Range-bound trading strategy
Range-bound trading is an effective strategy during periods of market consolidation when silver prices are stable and oscillate between support and resistance levels.
Traders use these levels to identify buying opportunities at the lower end of the range and selling opportunities at the upper end. To manage risk, stop losses are placed just outside the trading range to limit potential losses if prices break out unexpectedly.
Trend trading strategy
Trend trading, also known as position trading, is a long-term strategy that focuses on identifying and following prevailing market trends. An uptrend is characterized by higher highs and higher lows, while a downtrend features lower highs and lower lows.
Traders use indicators like the Relative Strength Index (RSI) or momentum oscillators to determine entry and exit points. For example, during an uptrend, traders might open long positions, whereas during a downtrend, they could short the market to profit from falling prices.
As with any strategy, risk management is critical. This includes setting stop losses and regularly reassessing the trend's strength.
Final Thoughts
Regardless of the strategy you choose, remember that past performance is not indicative of future results. Silver prices can be volatile, and market conditions may shift unexpectedly. Having a robust risk management plan is essential to protect your capital and navigate the complexities of silver trading effectively.
Risks and rewards to trading silver
Trading silver can offer exciting opportunities, but like any investment, it carries its share of risks and rewards. Whether you’re buying the dip or entering as prices climb, understanding both sides of the equation is key to making informed decisions.
Rewards of Trading Silver
- Capitalizing on Price Volatility: Silver’s market is known for its high volatility, providing opportunities to profit from both short-term price swings and long-term trends. Traders can use this volatility to their advantage, especially during periods of economic uncertainty when demand for precious metals often rises.
- Buying the Dip: Purchasing silver after a price correction, or "buying the dip," can lead to substantial gains if prices rebound. This strategy works particularly well when the dip aligns with strong technical support levels or bullish macroeconomic indicators, such as increased industrial demand or a weaker dollar.
- Riding the Climb: Entering the market during a price rally can also be rewarding. Traders who anticipate continued growth, supported by favourable trends like sustained inflation or geopolitical tensions, can capitalize on upward momentum. Technical analysis and economic indicators can help validate the decision to "ride the climb."
- Diversification Benefits: As a tangible asset with industrial and monetary uses, silver can act as a hedge against inflation and currency fluctuations, offering stability in a diversified portfolio.
Risks of Trading Silver
- High Volatility: While volatility can create opportunities, it also increases risk. Rapid price movements can lead to significant losses, especially for leveraged traders or those caught on the wrong side of a trade.
- Timing the Dip: "Buying the dip" carries the risk of misjudging the market. A perceived dip may turn into a prolonged downtrend, leading to potential losses if the market fails to recover as expected. Without proper risk management, this strategy can backfire.
- Overestimating Growth During a Rally: Buying during a climb assumes the trend will continue, but markets can reverse unexpectedly due to changes in sentiment, economic data, or policy shifts. Entering late in a rally can result in buying at peak prices, exposing traders to sharp corrections.
- External Influences: Silver prices are highly sensitive to external factors, including fluctuations in the U.S. dollar, interest rates, and industrial demand. Unexpected events, such as policy changes by the Federal Reserve or economic slowdowns, can rapidly alter market dynamics.
- Lack of Liquidity in Extreme Markets: During periods of extreme market stress, silver trading may experience lower liquidity, increasing transaction costs and the potential for slippage.