Silver Prices Forecast and price predictions: 2022 and Beyond

The silver price has been rising considerably in the past six months. The price has for a long-time underperformed gold, but its popularity has increased again. Over six months ago, the price of XAG was below $18, and a few months later, it almost hit $30. Recently we saw the price stabilize again. In this silver price forecast, we discuss the latest silver price expectations for 2021. In this investment outlook, we will look at both the fundamental rationale and the technical signals provided by prediction charts.

The article covers the following subjects:

Silver: A Historical Overview

Silver is a precious metal used in jewelry and industry (cutlery and electronics). Investors can buy silver in standard or measured bars and coins or speculate on the spot price of silver. Although its chemical symbol is Ag, silver is known by the symbol XAG in the financial markets.

Silver price movement charts can be used as an indicator of the economy’s state, and real-time tracking of precious metal prices can sometimes help predict silver demand, the future value of silver, and price movements in several financial markets, including major commodities, currency pairs, and stocks.

Silver as an asset class has a history of thousands of years, dating back to the first recorded mining in 3000 BC. As its popularity grew, mining spread throughout the world, and the use and value of silver increased. By the end of the 19th century, 120 million troy ounces a year were being produced to meet the precious metal demand.

The silver price change began to be recorded in the 1970s when silver was introduced at a starting price of $1.80 per troy ounce. In the early 1980s, the value of silver rose to $36 but soon dropped to below $10, where it remained for more than two decades.

The silver price record high was set on January 18, 1980, at $49.45 (£21.65) per troy ounce fueled by Nelson Bunker Hunt’s cornering of the market. The silver market then peaked at a significant high during the 2008 financial crisis when the price of silver nearly doubled to $20 but fell again shortly after that. The highest price for silver since then was recorded in 2011 when it was around $50 an ounce.

Is silver going up, and where are silver prices headed? Keep on reading.

How Does the Silver Price Come About?

The spot price of silver is determined by the forward contract (future) of the month with the most volume. This is usually the contract with the closest expiration date. These futures are traded through various commodity exchanges such as CME Group’s COMEX. The value of silver is thus directly determined by traders, supply, and demand.

Commodity companies use futures to set a guaranteed price for commodities such as silver or oil. These forward contracts guarantee that they can buy or sell the underlying asset at a fixed price and on a predetermined date. Such agreements significantly reduce risk.

Silver is often seen as gold’s little brother. Therefore, the silver market is much smaller than the gold market, so price movements can be even more volatile. Silver has a higher beta than gold. That means that the silver price responds with higher volatility to the overall market volatility. Naturally, this effect works both upwards and downwards.

Like gold, silver offers some protection against inflation, currency risks, and stock market falls. Many traditional investors would rather not have gold and silver in their portfolio as it does not pay off. The shiny metal does not give a dividend, and only price gains can provide returns.

Historically, gold and silver have a low correlation with stocks. A small percentage of commodities, including gold and silver, can therefore lower the risk of a well-diversified portfolio.

The price of silver is usually expressed in dollars worldwide. But since the introduction of the euro, the silver price is increasingly also shown in euros. The euro/dollar exchange rate has considerable fluctuations, which can also significantly influence the silver value.

The silver price is expressed in troy per ounce, and one troy ounce equals 31.1034768 grams. For example, if the silver price is at $16, you would pay $16 for a little over 31 grams of silver.

Demand for Silver

In the silver price history, the demand for this metal has been on the rise for years as industrial demand for it is increasing. For example, silver is widely used in solar panels, and the need for this is growing exponentially due to the energy transition. When made with silver, batteries can have a higher capacity, and demand for batteries also increases at an unprecedented rate. On top of the rising demand is a falling supply.

Since the coronavirus crisis, all the way through 2020, the price of silver has skyrocketed. Demand for this precious metal appears to have increased for inflationary reasons. To combat the coronavirus crisis, governments and central banks have started printing money en masse.

The money supply is overgrowing, and many investors are now afraid that this will cause inflation sooner or later. Gold and silver could enjoy higher demand in such a situation. Therefore, the hedge against inflation is the first argument for a rising silver price in the coming years.

Besides, both gold and silver still act as a safe haven. In the event of political or economic unrest, investors keep turning to precious metals. A mutated variant of the coronavirus or a financial crisis can also cause the silver price to skyrocket in the next few years.

Silver Price Today

On forex, the silver price today is $19.185. This precious metal is extensively used in manufacturing, meaning its price is susceptible to global demand making it volatile to trade. The value is interactive, so you can refer to this article to find out what the price of silver will be later this week or next week.

Silver Price Predictions for 2021 by Experts

The table below shows the 2021 silver price prediction from various commodity and bank experts. Here’s what they think XAG will be worth in 2021, on average.

Analysts Silver predictions
Analyst Lawrence Williams $32.25
CPM Group $28.17 on Avg
Metals Focus Well above $30
Citi $40
JP Morgan $26.50
Bank of America Above $31
BNP Paribas $23.50 on Avg
Bloomberg Intelligence Probably less then $50
Goldman Sachs $40

Next, we’ll look at a long-term silver price forecast through Technical Analysis.

Silver Technical Analysis and Price Prediction

We’ll start our technical analysis by exploring the global trend in the longest time frame.

The silver market has followed a global bullish trend for over 20 years. Studying the price history, we can surely say that the upward price movement has not been regular: strong short-term bullish impulses have been replaced by longer and deep corrections from time to time.

I will lay the Fibonacci grid onto the price chart to better understand trend developments. Four main development stages can be singled out:

1 (from 0 to 0.236) – trend bottom area;

2 (from 0.236 to 0.382) – consolidation area;

3 (from 0.382 to 0.786) – growth area;

4 (from 0.786 to 1) – area of peak values.

The markets of precious metals grow during economic instability as many investors see them as protection for their assets. Therefore, technical analysis of such markets should consider the most important fundamental factors affecting the global economy.

As seen in the chart, the silver price has tried to move to the green growth area in the past two years but returned to the bottom area amid a new cycle of instability caused by the events of February 2022. 

The price is currently below the key level of 21.40 USD. Last month, the pair attempted to test this resistance line from below but has been unable to do it so far.

Silver Forecast For Next Three Months

Let’s move to the XAGUSD‘s weekly chart to identify signals that can affect the market in the nearest time.

We will use the MACD indicator in our technical analysis to make a realistic forecast. The indicator’s histogram is approaching zero levels, which indicates a probable local bullish correction. It’s worth mentioning that the above-mentioned strong resistance level of 21.4 US dollars holds the price growth back. It served as a perfect support level throughout 2021 and will unlikely be broken in the nearest future.

The likeliest scenario for the nearest three months is that the XAGUSD rate will continue moving between that key level and the trend line of the global bullish trend’s bottom. The likeliest trading range for three months is 17.50 – 21.35 USD.

Long-Term XAGUSD Analysis for 2022/2023

The current market situation may linger until the end of 2024. All can change if the silver price breaks out at 21.40 USD. The price target of a bullish movement is around 27 USD. However, such a powerful move requires a long accumulation of strength at the current levels.

To make a long-term price forecast, we will use Bollinger Bands, identify regularities in different trend development periods, and thus calculate a future price of the XAGUSD for the next 12 months.

We will explore the likeliest scenario where XAGUSD’s future value continues consolidating in the range of 16.50 – 21.35 USD. Projected trading ranges for every month are outlined in the chart above. The lowest point is on a boundary of the global trend, around 16.20 USD. There, we can buy silver to fix the profits of a bullish correction a few months later. This year’s trend remains bearish, so shorts are given priority in a wider context. The price will likely return to support at 16.50 – 17.50 many times.

Price forecast XAG to USD

Experienced traders make trading decisions based on projected minimums and maximums. I have made a table of expected trading ranges for the XAGUSD for the next 12 months.

Month

XAG/USD price

Minimum, $

Maximum, $

August 2022

18.7

20.9

September 2022

18.1

20.2

October 2022

18.6

20.5

November 2022

18.8

20.2

December 2022

17.6

19.9

January 2023

17.1

19.4

February 2023

16.4

18.3

March 2023

16.7

18.6

April 2023

17.2

19.4

May 2023

17.8

19.8

June 2023

17.5

19.2

July 2023

16.9

18.6

XAGUSD Long-Term Trading Plan

Let’s now make a trading plan to make profits with the lowest risks.

Silver’s likeliest scenario for the coming two years is trading in a sideways market, so it’s preferable to trade from the limits of a trading range. The chart above shows a trading plan for opening short positions. The optimum entry point will be around 21 USD (marked with a blue line). A stop loss is placed outside the limits of the trading range (marked with a red line). Fix positions when the price approaches the lower range limit of around 17 USD. Then, wait for a reversal signal and open a long position.

For higher-frequency trading, you can use any channel indicators, such as Bollinger BandsStochastic, oscillators CCI/RSI, and other indicators for overbought and oversold stocks.

Observe your risk management rules and remember to fix profits to lower the chance of loss.

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XAGUSD technical analysis is presented by Mikhail Hypov.

Silver Prices Forecast 2022

Below is a silver price prediction chart for 2022. Please remember that long-term forecasts for all asset classes are very approximate and are subject to change at any time.

Month Open Low-High Close Mo,% Total,%
2022
Jan 34.75 34.75-38.75 36.90 6.2% 26.8%
Feb 36.90 36.90-41.15 39.19 6.2% 34.7%
Mar 39.19 34.92-39.19 36.76 -6.2% 26.4%
Apr 36.76 32.76-36.76 34.48 -6.2% 18.5%
May 34.48 32.99-36.47 34.73 0.7% 19.4%
Jun 34.73 34.51-38.15 36.33 4.6% 24.9%
Jul 36.33 32.41-36.33 34.12 -6.1% 17.3%
Aug 34.12 34.12-38.05 36.24 6.2% 24.6%
Sep 36.24 32.29-36.24 33.99 -6.2% 16.8%
Oct 33.99 33.99-37.91 36.10 6.2% 24.1%
Nov 36.10 36.10-40.26 38.34 6.2% 31.8%
Dec 38.34 38.25-42.27 40.26 5.0% 38.4%

Source: Longforecast.com

Silver Prices Forecast 2023

Next, we have listed a silver price prediction chart for 2023. Even more so for 2023, please keep in mind that long-term forecasts are often unreliable and are created to form an approximate idea of how the value of an asset class may perform in the future.

Month Open Low-High Close Mo,% Total,%
2023
Jan 40.26 37.33-41.25 39.29 -2.4% 35.1%
Feb 39.29 37.03-40.93 38.98 -0.8% 34.0%
Mar 38.98 36.72-40.58 38.65 -0.8% 32.9%
Apr 38.65 35.03-38.71 36.87 -4.6% 26.7%
May 36.87 36.33-40.15 38.24 3.7% 31.5%
Jun 38.24 38.24-42.64 40.61 6.2% 39.6%
Jul 40.61 37.83-41.81 39.82 -1.9% 36.9%
Aug 39.82 38.01-42.01 40.01 0.5% 37.5%
Sep 40.01 37.80-41.78 39.79 -0.5% 36.8%
Oct 39.79 35.45-39.79 37.32 -6.2% 28.3%
Nov 37.32 35.04-38.72 36.88 -1.2% 26.8%
Dec 36.88 34.60-38.24 36.42 -1.2% 25.2%

Source: Longforecast

Long Term Silver Price Prediction 2025-2030

Month Open Low-High Close Mo,% Total,%
2025
Jan 33.38 31.20-34.48 32.84 -1.6% 12.9%
Feb 32.84 32.68-36.12 34.40 4.8% 18.3%
Mar 34.40 34.40-38.36 36.53 6.2% 25.6%
Apr 36.53 33.37-36.89 35.13 -3.8% 20.8%

Source: Longforecast

Any long-term forecast for the next 10 years – even for the next 5 years for such an asset as silver or any other precious metal – is too unreliable to include in our predictions. This would be pure speculation. Because it’s so hard to predict, we will not provide prediction charts beyond 2025. Too many factors may affect the rate of silver and the silver price projection, and it’s best to be up-to-date with what’s happening in the global arena in order to make realistic and reliable predictions. In the next section of our article, we have described in detail what factors may affect the price of silver.

Factors That May Affect the Silver Price

The main factors affecting the price of silver are supply and demand, the global economy, and the gold/silver ratio.

Here is the list of factors which affecting silver price:

  • Consumption demand
  • Protection against volatility
  • Silver and inflation
  • Silver and interest rates
  • Good monsoon
  • Correlation with other asset classes
  • Geo political factors
  • Weakening dollar
  • Future Silver demand

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Supply and Demand

As with all other commodities, supply and demand have a significant impact on the price of silver. An average of 27,000 tons of silver is mined in the world annually. China, Mexico, and Peru occupy the leading positions in terms of production. The demand of such large importing countries as the USA, Great Britain, and India can be up to 29,000 tons of silver per year. Any anticipated increase, decrease, or imbalance could cause changes in the silver market forecast.

Much of the demand for silver is driven by the growing industrial use of silver. Silver has the highest electrical conductivity of any metal and has therefore become a key component in the manufacture of devices such as solar panels. The precious metal is also widely used in medicine.

Economic Forces

The global economy also affects the price of silver. During periods of economic prosperity, silver prices can rise as people buy more electronics, jewelry, and cars that have silver components. During times of economic and political crises (covered in the news), silver prices also rise, as silver is used as a “cheaper” security asset.

Gold/Silver Ratio

The ratio between the prices of gold and silver shows how many ounces of silver are needed to buy one ounce of gold. In mid-2019, the gold to silver ratio was 90 pips, which means that you will need 90 ounces of silver to buy one ounce of gold. This indicates that silver was undervalued. When the ratio is high, investors generally prefer silver because it is cheap compared to gold. At a lower ratio, gold is more often preferred, and as the ratio decreases, the common solution is to sell silver and buy gold.

Silver and USD

Silver and the US dollar have an inverse relationship. This is due to the fact that the weakening dollar makes silver more affordable for other countries to buy, which often leads to an increase in XAG quotes. A strong dollar makes silver more expensive, which means that the metal will see a price fall.

The inverse relationship between silver and the US dollar makes silver a popular hedge against inflation – as paper money prices decline, investing in silver can protect against these losses as the precious metal retains its value. However, it also means that a strong US dollar could put downward pressure on the price of silver. We can’t be sure what will happen in the next 5 years, but we can see what happened in the past. Below you’ll see how the XAGUSD rate changed over the past 5 years:

What Is the Future of Silver? Is Silver a Good Investment?

Will silver keep going up? The metal’s future price seems to be stabilizing again after the run-on silver at the beginning of February 2021. Interest in the precious metal is still high, but there does not seem to be a so-called silver squeeze as yet. However, the silver prices outlook still looks favorable, as industrial demand for silver is also picking up and inflation is rising. As a result, many commodities are in an upward trend again. Together with the return of investors to the silver market, this could further support the price of the precious metal.

Month Open Low-High Close Mo,% Total,%
2021
Mar 29.09 26.01-29.57 28.16 -3.2% -3.2%
Apr 28.16 28.16-31.23 29.74 5.6% 2.2%
May 29.74 29.74-33.16 31.58 6.2% 8.6%
Jun 31.58 31.58-35.22 33.54 6.2% 15.3%
Jul 33.54 32.42-35.84 34.13 1.8% 17.3%
Aug 34.13 32.07-35.45 33.76 -1.1% 16.1%
Sep 33.76 30.09-33.76 31.67 -6.2% 8.9%
Oct 31.67 31.67-35.31 33.63 6.2% 15.6%
Nov 33.63 33.63-37.51 35.72 6.2% 22.8%
Dec 35.72 33.01-36.49 34.75 -2.7% 19.5%

Source: Longforecast

According to the Silver Institute, the silver outlook looks bright at the moment. They expect a further price increase to $30 per troy ounce, perhaps much more than the price at the time of writing. This price increase is not only related to an increase in industrial demand but also to continued interest in silver as a safe haven.

According to research firm Metals Focus, when the price of silver falls, investors easily get into ETFs, while they are much less likely to sell their position to make a profit. More and more investors are looking at the long-term forecast and are buying for the longer term and are therefore holding their position. Especially now that savings no longer generate interest, the precious metal seems a very attractive alternative.

Make sure to create a free demo account on LiteFinance! On LiteFinance, you will be up to date on interesting updates about silver as an investment asset, and the user-friendly interface will come in handy if you decide to start trading silver or other commodities.



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Price chart of XAGUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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