Silver Price Outlook – June 2024

“Silver Price Outlook
Silver prices rose strongly during May. Prices touched an intraday high of $32.75 on 20 May, which was the highest level that prices had reached since December 2012.

At the time of writing this report, silver prices are back down to $30. Silver prices are expected to move in a sideways to lower fashion over the next few months. Silver prices are expected to rise in a more sustainable fashion over the last quarter of this year, potentially testing record levels either later this year but more likely sometime in 2025.

In the next few months there are several factors that could act as headwinds to silver prices, which include seasonal weakness in fabricator, jeweler and investor demand, weaker gold prices, and stale bull liquidation. The most important of these factors is expected to be stale bull liquidation. There are several investors who have purchased silver in recent past years in anticipation of higher prices, some with expectations of prices rising to levels above the records set in 2011. It has been more than 13 years since prices reached record levels.

Some of these investors who had purchased silver especially in the high $20s or higher have been selling some of their metal during the May run up in prices. Some investors are still buying silver, but those purchases are being offset by gross sales by other disappointed investors selling their metal.

These investors are likely to continue to sell their metal both when prices fail to rise and disappoint them, and when prices rise to the levels at which they originally bought, i.e. between $28 and $33 for many. While some investors may hold their metal in anticipation of still higher prices, others will be happy to recoup their original acquisition prices after years of disappointment.

To be clear, CPM Group does expect silver prices to rise to fresh levels, possibly setting new daily and annual records, supported by the metal ’s fundamentals. However, a completion or at least a pause in the stale bull liquidation seems to be required for prices to make their way to new highs. Further price increases seem likely to be delayed.

There are several reasons for investors to add silver to their holdings, some of which include elevated global political risks (both cross border as well as domestic), high global debt levels, an interest rate environment that is unlikely to return to levels seen between late 2008 and early 2022 (which raises the risk of something breaking, especially in the weaker corners of the financial system), and strong demand from the solar panel industry.

Silver prices are likely to move between $26.50 and $32 in the coming months.”