Silver Price Forecast: Most Likely a Strong Decade Ahead
The comments below are an edited and abridged synopsis of an article by Lyn Alden
There is always more attention on gold than silver.
Central banks primarily buy gold, not silver. Investors view gold as a safe haven, not silver. Gold is for kings and queens, while silver is for ladies and gentlemen.
Silver is more speculative. It is a smaller market; it is primarily a mining by-product of other metals rather than a directly mined metal itself; and it is a metal that has both an industrial side and a monetary/jewelry side, with the industrial side being larger. Electronic devices, electric vehicles, solar panels, and a variety of other industries use silver.
The annual supply and demand for silver hovers around one billion ounces per year. At current prices, that means less than a $20-billion annual market, which is tiny compared to the scale of global markets for stocks, bonds and real estate. It is small enough that some wealthy individuals could corner the market, and it is a smaller figure than the annual revenue of typical S&P 500 companies.
However, when it moves, it can be explosive, and it can make for an interesting investment or hedge. This article takes a look at the expected range of returns that silver may provide in the coming years.
Up for discussion: Stocks vs. silver; gold vs. silver; and dollar weakness.
With stocks historically expensive, interest rates historically low, the Fed having shifted from relatively tight monetary policy to extremely loose monetary policy, and silver still rather cheap after a long bear market, Alden is bullish on silver over the next several years.
There will be bumps along the way, and maybe one more deflationary crunch to lower silver prices before the big rise, but she is happy to continue buying on dips and to maintain exposure to silver as a vital component of her portfolio.