2018 was supposed to have been a great year for precious metals, but it ended up being a down year for investment assets across the board, from stocks and bonds to gold and silver. Silver was hit hard, with a 9% drop over the course of the year, slightly worse than the 5.6% drop in the Dow Jones Industrial Average. But 2018 is behind us now, and silver so far has been going on a tear in 2019.
Silver’s performance during the summer of 2019 has investors flocking to the white metal, with an 80% increase in bullish positions among futures investors. And a 6% rise in price over the past week is only a foreshadowing of what is to come.
Silver is already in short supply above ground, with decreasing amounts of the metal being mined each year. Increased demand from industry, such as in the production of solar cells, is rapidly drawing down silver stores. And with increased demand from investors, the conditions are right for massive gains in the silver price in the coming months and years. Even if an economic downturn and slowing world economy were to decrease industrial demand, the increased silver demand from investors would more than make up for that.
Keeping up with trends in the precious metals market and attempting to predict the future price of silver can help investors determine what percentage of their retirement portfolio they want to allot to silver. As part of a balanced and diversified portfolio, silver can play a strong role in protecting your investment wealth in the face of economic headwinds. Whether you decide on a silver IRA rollover or just want to get started with a roll of silver coins, investing in silver can help safeguard your wealth through turbulent times.
Future Silver Price Predictions
One of the problems that many people have when looking at the silver price, and financial assets in general, is looking at short-term price movements. The price of silver throughout the day can be influenced by any number of factors: large silver depositories leasing silver, institutional investors reallocating assets ahead of quarterly filings, or even just pieces of positive or negative news regarding industry or politics. But if you’re going to invest in silver for the long term, it’s far more important to predict what silver will be worth in 10 years rather than what the price will be in 10 days.
If you want to accurately make a future silver price prediction, you have to screen out most of the news and commentary that you’ll read regarding silver. From overly enthusiastic silver bulls to bears who think silver will eventually be worth less than lead, financial media is full of people with their own take on silver. Screen out the noise and focus on the big picture issues that will drive silver prices.
It may behoove you to avoid many of the aggregated economic statistics such as inflation figures, which don’t always correlate to moves in the silver price. Since silver production is largely a byproduct of mining for gold, copper, lead, and other metals, and because silver demand is split about 50/50 between industrial and investment demand, you may want to make a future silver price prediction by looking at moves in the prices of other metals such as gold and copper.
The Price of Gold
Silver’s price is most analogous to that of gold, particularly when economic performance turns for the worse. During a weak economy, the prices of base metals, such as copper and nickel, deteriorate due to falling demand from industry. In contrast, the prices of silver and gold rise as investors snap them up to strengthen their investment portfolios.
Gold and silver prices, therefore, often fluctuate in tandem, although silver tends to experience more volatility in price, particularly on the upside. It’s rare to see gold increase and silver drop, or vice versa. And the long-term trends for both metals generally tend to mirror each other.
Gold gets all the attention in the mainstream financial press, which is understandable. But when you start to read about gold picking up steam and seeing price increases, there’s a very good chance that silver is making similar moves. And just like in recent weeks, those moves in the silver price are often larger percentagewise than those in gold.
The Euro and Dollar
It’s perhaps not surprising that gold and silver are priced in dollars in the US and in euros in Europe. Because of the constantly fluctuating exchange rate of the dollar to the euro, silver could be increasing in price in Europe while decreasing in price in the United States. Pay attention to silver’s price both in euros and dollars, and to what the long-term silver forecasts in each currency are. When silver makes a breakout run, it increases in price in both currencies.
You also want to pay attention to the dollar index, because that indicates the relative strength of the dollar against other major world currencies. As the dollar index declines, that normally indicates a rise in price for both gold and silver. Again, pay attention to long-term trends and ignore short-term noise to make an accurate future silver price prediction.
The Commitment of Traders Report
The Commitment of Traders Report (COT) is data published by the US Commodity Futures Trading Commission (CFTC). It consists of data describing the positions held by large traders in commodities such as gold and silver.
Analyzing the COT reports each week shows which way professional traders are moving in the markets and what their expectations of the long-term silver market forecast are. The more long positions taken, the higher traders predict the future silver price will be. The more short positions taken, the lower they predict the future silver price will be.
It’s important to look not so much at the total positions, but the change in positions from week to week. The more traders moving from short to long positions, the better the outlook is for the silver price.
Investing in Silver
If you decide that silver has tremendous potential for price appreciation and is the right investment for you, the next step is deciding on how to invest in silver. The options can seem limitless and daunting, especially to someone who has no experience with precious metals markets.
Thankfully there are experts out there who can help you navigate all of your options. Whether your first experience comes by buying a handful of coins, or by rolling over existing retirement assets into a gold and silver IRA, the experts at Goldco can help you find the right investment method for your state in life. If you decide that a silver IRA is right for you, Goldco can even point you in the direction of the right IRA-eligible silver coins and bars that you’re allowed to invest in.
The silver market forecast looking to the rest of this year and into next seems incredibly bright. The stage has been set for a surge in the silver price as rising silver demand and diminishing supply are providing the perfect set of factors for a nice bull market. Don’t let yourself get left behind as silver once again makes its move. Talk to the experts at Goldco today to see how you can make silver an important part of your retirement savings plan.
This article was originally posted on Goldco.
