Silver Price Outlook – July 2024

Silver Price Outlook
“Silver prices declined over the course of June, after reaching multi-year highs in May. The rapid decline in silver prices relative to gold resulted in the monthly average gold:silver price ratio rising once again during June. During June, the ratio had risen to 79.4, after falling to 75.1 in May, its lowest level since October 2021.

Silver prices are expected to rise in the medium term, and their gains are expected to be sharper than gold, especially on account of the metal’s recent underperformance relative to gold. Gold prices have broken several record highs during the first half of 2024 while silver prices have been struggling to sustain gains over $30 and trading well below their record high levels reached in April 2011.

One of the biggest challenges that silver prices face is the selling by past investors who bought in anticipation of silver prices far in excess of the record levels reached in 2011. While the gains in silver prices over the past five years have been impressive and extremely profitable for silver investors, other investors who had overly inflated silver price expectations have been getting out of their positions either at breakeven or at a loss rather than continue to have their money tied up in silver for the next time silver prices reach record levels. Such selling could continue for some time, with many investors having bought at levels above $30. Once these investors are done with selling, it will allow silver prices to rise more strongly. May 2024 was the first time that silver prices rose above $30 since February 2021.

Silver prices are expected to move sideways with strong support for prices around $28.30. Seasonal weakness in prices could force silver toward this support. Given the mixed nature of economic data being released at this time any particularly positive economic data could also reduce investor desire to increase holdings of safe haven assets like silver. If prices break the $28.30 support level, there could be a brief period where silver prices slip to $26.22.

Given the possibility of generally higher political and economic risk during the last four months of this year any decline in prices to those levels seem likely to be treated by some investors as a buying opportunity, shortening the period for which silver prices will linger at lower levels. Silver prices are most likely to move sideways between $28.30 and $33, with a slight possibility that prices break above the $33 level.”