What’s in store for silver in the future? Keith Neumeyer of First Majestic Silver has said he sees the white metal reaching US$100 per ounce.
The silver price made waves in 2020 when it rose above US$20 per ounce for the first time in four years. Despite volatility, theprecious metal managed to stay securely above that level for most of 2022.
Nonetheless, well-known figure Keith Neumeyer, CEO of First Majestic Silver (TSX:FR,NYSE:AG), has frequently said he believes the white metal could climb even higher, reaching into the triple digits.
Neumeyer has voiced this opinion often, most recently discussing it in an August 2022 interview with Wall Street Silver. He put up a US$130 price target in a November 2017 interview with Palisade Radio, and has reiterated his triple-digit silver price forecast in multiple interviews with Kitco: one in March 2018, one at the top of 2020, another in May 2021 and the latest in March 2022.
At times he’s been even more bold, suggesting the white metal could reach US$1,000.
In order to better understand where Neumeyer’s opinion comes from and whether a triple-digit silver price is really in the cards, it’s important to take a look at the factors that affect the metal’s movements, as well as where prices have been in the past and where other industry insiders think silver could be headed. First, let’s dive a little deeper into Neumeyer’s US$100 prediction.
Why is Neumeyer calling for US$100 silver?
There’s a significant distance for silver to go before it reaches the success Neumeyer has boldly predicted. In fact, in order for the precious metal to jump to the US$100 mark, its price would have to increase from its current value by more than 350 percent.
Neumeyer expects a triple-digit silver price in part because he believes the current market cycle can be compared to the year 2000, when investors were sailing high on the dot-com bubble and the mining sector was down. He thinks it’s only a matter of time before the market corrects, like it did in 2001 and 2002, and commodities see a big rebound in pricing. It was during this time that Neumeyer himself invested heavily in mining stocks and came out on top.
“I’ve been calling for triple-digit silver for a few years now, and I’m more enthused now,” Neumeyer said at an event in January 2020, noting that there are multiple factors behind his reasoning. “But I’m cautiously enthused because, you know, I thought it would have happened sooner than it currently is happening.”
In his August 2022 with Wall Street Silver, he reiterated his support for triple-digit silver and said he's fortunately not alone in this optimistic view — in fact, he's been surpassed in that optimism. "I actually saw someone the other day call for US$500 silver," he said. "I'm not quite sure I'm at the level. Give me US$50 first and we'll see what happens after that."
Another factor driving Neumeyer's position is his belief that the silver market is in a deficit. In a May 2021 interview, when presented with supply-side data from the Silver Institute indicating the biggest surplus in silver market history, Neumeyer was blunt in his skepticism. “I think these numbers are made up,” he said. “I wouldn’t trust them at all.”
He pointed out that subtracting net investments in silver exchange-traded products leaves the market in a deficit, and also questioned the methodology behind the institute’s recycling data given that most recycled silver metal comes from privately owned smelters and refineries that typically don’t make those figures public.
"I'm guessing the mining sector produced something in the order of 800, maybe 825 million ounces in 2022," Neumeyer said when giving a Q4 2022 overview for his company. "Consumption numbers look like they're somewhere between 1.2 and 1.4 billion ounces. That's due to all the great technologies, all the newfangled gadgets that we're consuming. Electric vehicles, solar panels, windmills, you name it. All these technologies require silver … That's a pretty big (supply) deficit."
More controversially, Neumeyer is of the opinion that the white metal will eventually become uncoupled from its sister metal gold, and should be seen as a strategic metal due to its necessity in many everyday appliances, from computers to electronics, as well as the technologies mentioned above. He has also stated that silver production has gone down in recent years, meaning that contrary to popular belief, the metal is actually a rare commodity.
What factors affect the silver price?
In order to glean a better understanding of the precious metal’s chances of trading around the US$100 range, it’s important to examine the elements that could push it to that level or pull it further away.
The strength of the US dollar and US Federal Reserve interest rate changes are factors that will continue to affect the precious metal, as are geopolitical issues and supply and demand dynamics. Although Neumeyer believes that the ties that bind silver to gold need to be broken, the reality is that most of the same factors that shape the price of gold also move silver.
For that reason, it’s helpful to look at gold price drivers when trying to understand silver’s price action. Silver is, of course, the more volatile of the two precious metals, but nevertheless it often trades in relative tandem with gold.
Looking first at the Fed and interest rates, it's useful to understand that higher rates are generally negative for gold and silver, while lower rates tend to be positive. That's because when rates are higher interest shifts to products that can accrue interest.
When the COVID-19 pandemic hit, the Fed cut rates down to zero from 1 to 1.25 percent. However, rising inflation has led the Fed and other central banks to hike rates, which has negatively impacted gold and silver. In February 2023, the Fed raised rates by just 25 basis points, the smallest hike since March 2022, as Chair Jerome Powell said the process of disinflation has begun.
While central bank actions are important for gold, and by extension silver, a key price driver lately has been geopolitical uncertainty. The past few years have been filled with major geopolitical events such as tensions between the US and other countries such as North Korea, China and Iran. More recently, the huge economic impact of the COVID-19 pandemic and Russia's war with Ukraine have been major sources of concern for precious metals investors.
The Russia/Ukraine war is expected to weigh heavily on commodities markets, including precious metals, even after the conflict ends, with many expecting sanctions to remain. Speaking to the Investing News Network (INN) in March 2022, not long after the conflict broke out, Lobo Tiggre, founder and editor of IndependentSpeculator.com, said he believes these sanctions will lead to a "new Iron Curtain," which will have lasting economic consequences on a global scale.
"It's not a small thing, and it's not going away. I mean, except for an unlikely scenario, it seems to me that this is a paradigm shift; it's a one-way transition," he said. "And we will be dealing with the costs for many years to come."
On a separate note, silver’s close ties to gold’s safe-haven status should be beneficial in the long term, and there is also a strong case to made for the metal's industrial potential. According to CIBC analysts in mid-2021, higher industrial demand from emerging sectors due to factors like the transition to renewable energy will be highly supportive for the metal over the next few years.
Does historic price action support US$100 silver?
While not all silver market watchers anticipate a triple-digit silver price in the near future, there is support for Neumeyer’s belief that the metal is undervalued and that “ideal conditions are present for silver prices to rise.”
Many are on board with Neumeyer in the idea that silver's prospects are bright, including Peter Krauth of Silver Stock Investor, who believes that "we are very likely going to experience the greatest silver bull market of our generation."
So, if the silver price does rise, how high will it go?
Let’s look at silver’s recent history. The highest price for silver was just under US$50 in the 1970s, and it came close to that level again in 2011. The commodity’s price uptick came on the back of very strong silver investment demand.
After spending the latter half of the 2010s in the teens, the 2020s have seen silver largely hold above US$20. In August 2020, the price of silver reached nearly US$28.50 before pulling back again, and moved back up near those heights in February 2021. The price of silver saw a 2022 high point of US$26.38 in May, but has remained under US$25 thus far in 2023.
What do other experts think about US$100 silver?
Many experts in the space expect silver to perform strongly in the years to come, but don't necessarily see it reaching US$100 or more, especially given the current macroeconomic conditions.
Back in February 2022, David Morgan of the Morgan Report told INN he thought there was potential for silver to hit US$50 in the short term, as high levels of stock market volatility could make the white metal more attractive to investors and might drive it up over the US$30 mark. "Once silver gets above US$33 and it stays there for three or four days — or better yet, even two or three weeks — there's not much holding it back to hit US$50 again," he said at the time.
However, 2022 didn't shake out as many expected, and Morgan's expectations are more muted for 2023. "We'll have to see what happens," he said at the end of 2022. "Last time we got near US$30, very close to it. Rostin Behnam of the (Commodity Futures Trading Commission) came out and said they had to tamp down the silver market. What kind of a free market is that?"
From a longer-term lens, Matt Watson, founder of Precious Metals Commodity Management, thinks that over the next decade silver will benefit greatly from increased industrial demand, particularly from the electric vehicle, solar photovoltaic and electronics industries. This increasing demand for the white metal is happening in concert with decreasing mine supply, which has the potential to push the silver price to US$50 — just not in the short term.
"Now, as (silver) starts pushing, like I said, into the mid-2030s and becomes more of an industrial-based metal, then I think you see the likelihood of that 8 percent growing to a 10 to 12 percent type of CAGR," Watson told INN.
Tiggre agrees with this long-term outlook. "The industrial side of silver is very bullish for silver over years to come, even if the safe-haven demand for gold goes away," he said in an interview with INN in January 2023. "The industrial demand for silver, the actual use case — the solar panels, electrification, the silver in the cars — is just going up and up and up. So I quite like silver a lot."
As mentioned, some experts, including Krauth, agree with the triple digit silver hypothesis. In a May 2022 interview with INN, he explained that there are multiple paths silver could take to get to the triple digits.
"As I was doing my research, and this goes back over several years already, I would get to that US$300 forecast for an ultimate high in the silver price in different ways," he said. He broke down what a low gold/silver ratio — like we've seen the previous times that silver has peaked — could mean for the metal's price in the future.
FAQs for silver
Why is silver so cheap?
The primary reason that silver is sold at a significant discount to gold is supply and demand.
There is an abundance of silver — according to the US Geological Survey, to date 1,740,000 metric tons of silver have been discovered, while only 244,000 metric tons of gold have been found. The massive amount of available silver has not been met with heightened demand, which has kept prices low.
How to invest in silver?
There are a variety of ways to get into the silver market. For example, investors may choose to put their money into silver-focused stocks by buying shares of companies focused on silver mining and exploration. As a by-product metal, investors can also gain exposure to silver through some gold companies.
There are also silver exchange-traded funds that give broad exposure to silver companies and the metal itself, while more experienced traders may be interested in silver futures. And of course, for those who prefer a more tangible investment, purchasing physical silver bullion in bar and coin form is also an option.
Is silver better than gold?
There are merits for both metals, especially as part of a well-balanced portfolio. As many analysts point out, silver has been known to outperform its sister metal gold during times of economic prosperity and expansion.
On the other hand, during economic uncertainty silver values are impacted by declines in fabrication demand.
Silver’s duality as a precious and industrial metal also provides price support. As a report from the CPM Group notes, “it can be seen that silver in fact almost always (but not always) out-performs gold during a gold bull market.”
This is an updated version of an article originally published by the Investing News Network in 2016.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
From Your Site Articles
- Should You Invest in Silver Bullion? (Updated 2022) ›
- Silver Price Manipulation: Fact or Fantasy? ›
- Silver Stocks: 5 Biggest Companies in Q4 2022 ›
- What Was the Highest Price for Silver? INN - Investing News ›
- What are Silver Futures? ›
- When Will Silver Go Up? (Updated 2022) ›
Related Articles Around the Web
FAQs
How high will silver go in 2023? ›
The price of silver will move to our first bullish target of 34.70 USD in 2023. We expect 48 USD soon after, not later than in 2024. Silver will move higher in 2023 because we expect the top in the US Dollar to be confirmed.
Will silver reach $100 an ounce? ›The fastest way that silver can get to $100 an ounce is if inflation hits double-digit levels in 2022 and 2023. In 2021, the year-over-year inflation rate is about 9.75%. This is the highest rate of inflation in 40 years.
Will silver Skyrocket 2023? ›Silver supply is expected to rise by 4 percent in 2023 to a new high of 1.055 billion ounces, which will be a new high, fueled by higher mine output.
How high could silver go? ›Silver prices could touch a 9-year high in 2023 — with a bigger upside than gold. Silver could hit a nine-year high of $30 per ounce this year and become a better performer than gold.
Where will silver be in 10 years? ›The price could grow within the range of 500%-2500% in ten years. We have a track record supporting this prediction; between 1970-1979, the price grew from $1.70 an ounce to about $50, a 3000% growth in 10 years.
What will silver be worth if the economy collapses? ›Historically, if the dollar falls in value, silver will rise in the marketplace. However, if the dollar completely collapses, the American currency will be worthless. This outcome will leave silver null and void. If no person or company buys silver, then the value of the metal will decrease as well.
Will silver go up if dollar crashes? ›One reason is because there's a limited supply of silver, meaning as demand increases if the dollar collapses, the value of silver will actually go up, since there's not an indefinite amount of silver left.
Has silver ever reached $50 an ounce? ›The highest price for silver was just under US$50 in the 1970s, and it came close to that level again in 2011.
Will the price of silver explode? ›Gold and silver prices are expected to rise in 2023, with a weaker U.S. dollar and easing monetary policy likely to push the precious metals higher, according to analysts.
Should I buy silver in 2023? ›Silver remains an attractive investment option in 2023, mainly as a hedge against inflation and other economic uncertainties. When the government prints too much money, the value of the paper currency tends to decline, and prices go up.
Will silver keep up with inflation? ›
Unlike paper currency and stocks, physical precious metals like gold and silver are resistant to inflation because they derive their value differently than paper currency.
How much silver should I own? ›GuruFocus.com suggests an overall 10–20% allocation of precious metals, with silver making up a 30% share of that allocation if you're aiming to preserve wealth. “Silver and gold belong in every balanced portfolio. There's no magic percentage of silver and gold you should include,” GuruFocus.com advises.
How rare is silver becoming? ›To date, some 1.4 billion kg of silver has been mined throughout human history. However, silver corrodes, and just under half of that silver no longer exists as a metal. Of what has been mined, only 777 million kg still exists.
Will silver ever be rare? ›There are only 3 billion ounces of silver in the world. That means there is less than half an ounce available for every human being on the planet. That would make the asset extremely rare and valuable. During these conditions, you would have to value silver in terms of what it could buy.
How much unmined silver is left? ›The United States Geological Survey estimates there is still a total of 530,000 metric tonnes of silver below ground ready to be mined.
Will silver ever reach $1000? ›A 9:1 ratio has never been the standard for the gold to silver ratio and we don't expect that to change. In short, it is highly unlikely that the price of Silver will reach $1,000 per ounce. Silver is used more industrially than Gold and its price does not react the same way to economic events.
Does silver have a future? ›Metals Focus expects to see a 2022 mine production to increase of 2 percent to 843.2 million ounces, while overall global silver supply is seen rising by 3 percent to 1.03 billion ounces. Growth in mine production is anticipated to continue over the medium term.
Does silver have a good future? ›As a physical asset, it has intrinsic worth, unlike the dollar or other currencies. Silver holds its value long term and fares well when interest rates are low — and fixed-income investments aren't earning much. In these ways, silver functions like gold as an investment, serving a similar "safe haven" role.
What to buy if the U.S. dollar collapses? ›Gold, Silver, and Other Precious Metals
When there is a political or economic disaster, precious metals are traditionally considered a safe haven asset. And there is a reason for that. Precious metals can't be printed like paper money, which makes them a good hedge against economic collapse.
Investing in U.S. exporters, tangible assets (foreigners who buy U.S. real estate or commodities), and appreciating currencies or stock markets provide the basis for profiting from the falling U.S. dollar.
What will silver do during inflation? ›
How Does Inflation Affect Silver Price? Historically, the value of the dollar and the price of silver have had an inverse relationship. When the value of a dollar is high, the price of silver tends to pull back. When inflation is high and the dollar loses value, the price of silver goes up.
What was the highest price of silver ever recorded? ›Highest Ever Silver Prices in US Dollars, Sterling and Euros
The silver price record high was set on 18th January 1980 at $49.45 (£21.65) per troy ounce fuelled by Nelson Bunker Hunt's cornering of the market.
Silver coins offer several advantages over investing in silver bars, such as easier selling of smaller quantities at once, higher resale value due to collectible value and rarity factors, and better protection against counterfeiting or fraudulent products.
How much silver does Warren Buffett own? ›Investopedia contributors come from a range of backgrounds, and over 24 years there have been thousands of expert writers and editors who have contributed. Warren Buffett does not invest in gold. He has invested almost $1 billion in silver, so the reason for his aversion is not simply a dislike for precious metals.
What year did silver hit an all time high? ›Historically, Silver reached an all time high of 49.51 in April of 2011. Silver - data, forecasts, historical chart - was last updated on April of 2023.
Why did silver Skyrocket in 1980? ›The cause for a rise in silver prices from $6 per oz. in early 1979 to $50 per oz. in January 1980 was largely attributed to the actions of the Hunt brothers, W. Herbert Hunt and Nelson Bunker Hunt.
What is the precious metals forecast for 2023? ›In 2023, Silver prices are expected to settle at around 23.5 U.S. dollars per troy ounce. It is expected to remain the precious metal with the lowest value per ounce. The price of gold is forecast to drop to around 1,663 U.S. dollars per ounce, making it the most expensive precious metal in 2023.
How high will silver be in 10 years? ›According to the latest long-term forecast, Silver price will hit $40 by the end of 2024 and then $50 by the end of 2025. Silver will rise to $60 within the year of 2028, $70 in 2030, $80 in 2031 and $90 in 2033.
Will silver ever run out? ›Silver Supply Can't Be Predicted with Certainty
The world may eventually run out of silver at some point, but this is also true of other precious metals like gold and platinum. However, it's not possible to accurately predict when this could happen with any degree of certainty.
Therefore, 2025 is also expected to be a good year for the precious metal. Coming into 2025, silver should be able to record a meaningful price increase within the first six months of the year. Our forecast shows that it should trade for at least $44.02 by the end of June 2025.
Is there a physical silver shortage in 2023? ›
In total, global investors bought 1.242 billion ounces of silver bullion bars and coins despite worldwide supplies only totaling 1.004 billion ounces. This imbalance is supposed to worsen in 2023 as demand continues to rise and supplies stagnate.
Will silver always hold its value? ›A store of value: Silver can hold its value and even gain over time, providing a way for investors to generate profits. Liquidity: Silver is generally a liquid market, and if you're buying certain kinds of silver assets, they're highly liquid.
How much is a 2023 silver dollar? ›These features will make the coins more difficult to counterfeit. The 2023 American Eagle One Ounce Silver Proof (W) is priced at $80.00.
Does silver go up when gold goes up? ›While the real significance of the gold silver ratio is the subject of intense debate, there is a historic relationship between the price of gold and that of silver. In general terms, as the price of gold moves up or down, silver prices will follow.
What happens to silver when interest rates rise? ›Silver and debt are virtually complete opposites; therefore, when interest rates are low, the market is putting a low value on silver, and when interest rates are high, then the market is putting a high value on silver.
Why did China only accept silver? ›China had a high demand for silver due to its shift from paper money to coins in the early period of the Ming dynasty. The Ming paper currency eventually failed due to self-imposed inflation along with an inability to stop the production of counterfeit bills.
How much silver can you buy without reporting to government? ›995 and the total purchase quantity must be 1 kilo (32.15 troy ounces) or more. Similarly, for sales of silver bars and rounds to warrant reporting, each silver piece needs to possess a fineness of at least . 999 with a total purchase quantity of 1,000 troy ounces or more.
How much silver does the average person own? ›With a global population of approximately 7.8 billion people as of 2019, that's about 0.385 ounces of silver per person or nearly as much silver as found in a standard pre-1965 United States 90% silver half dollar.
Should you own physical silver? ›While silver can be volatile, the precious metal is also seen as a safe-haven asset, similar to its sister metal gold. Safe-haven investments can offer protection in times of uncertainty, and with tensions running high, they could be a good choice for those looking to preserve their wealth in difficult times.
Can you get 100 percent silver? ›999 silver jewelry is the closest you'll get to pure silver. It's called . 999 silver because it's technically 99.9% pure silver! This type of silver is the highest quality silver you can buy.
Is it possible to get 100% pure silver? ›
Technically, no. While a silver alloy that is at least 99.9% pure can be called pure silver, it's currently not possible to remove 100% of all impurities from silver. The highest purity silver alloy made so far is 99.999% pure, and was produced by the Royal Silver Company of Bolivia.
How far in the future is silver? ›Silver's future is a location that appears in the Sonic the Hedgehog series. It is a timeline set approximately two hundred years into the future of Sonic's universe, and which individuals such as Silver the Hedgehog and Eggman Nega come from.
What will silver be in 2027? ›While long-term and modest forecasts expect silver to hit $30 by 2025 and $40 by 2027, Keith Neumeyer, CEO of First Majestic Silver, thinks medium to long-term, silver could reach $125 per ounce, thanks to the automobile industry.
Will silver run out in 2028? ›Analysts predict that at current rates, the earth could run out of economically mineable silver reserves by 2028, which could have significant implications for the market and economy.
Will silver prices rise in 2023? ›The year-to-date silver price average for 2023 (through to February 7) is more than 8 percent higher than the full year price average for 2022. Silver is also expected to achieve a new high in industrial applications, the most important category in the demand complex.
What percentage of Americans own silver? ›"12% of all Americans own gold, 14.7% own silver"
How much will 1 oz of silver be in 2025? ›Still, six-month statistics show an ounce of silver is 14% higher than it was on September 6, 2022. According to the forecast on coinpriceforecast.com recorded on March 6, 2023, silver's price will “hit $30 by the middle of 2025 and then $40 by the end of 2026.”
What will silver be worth in 5 years? ›Yes, according to our predictions, the average price of silver (XAG) will be around $28.11 at the end of 2023. In 2024, the average price is expected to reach $31.95. In the next five years (2027), XAG is expected to have an average price of $60.74. The projected price for 2030 is $79.58.
Will silver go up in 5 years? ›Silver price predictions for next 5 years | experts say
Three months ago, a Reuters poll predicted silver prices would average $23 per ounce in 2023 and $24 in 2024, sharply higher than the $20 for 2023 predicted in the last poll.
Silver could be a good option if you're considering investing a small amount of money, as it has more upside potential due to its industrial uses. On the other hand, if you plan to invest a larger sum, gold might be a better choice due to its scarcity and potential for higher gains.
What is the best metal to buy in 2023? ›
Palladium: The Best Buy in the Precious Metals Market in 2023.
What is the best metal to invest in 2023? ›Historically, recessions have been positive for the gold price. In the absence of further major shocks in 2023, investors might look to put their money into commodities, particularly gold but also silver.
Will silver go up if inflation rises? ›Silver is sometimes referred to as the "poor man's gold." As precious metals, both silver and gold can rise in price if investors want a safe haven during times of economic uncertainty, and both can hold their value better than some other assets during times of inflation.