Silver Price Outlook – May 2024

“Silver Price Outlook
Silver prices rose alongside those of gold. Unlike gold, which made several new records over the past month, silver prices are nowhere near their record highs reached in 2011. While CPM Group expects silver prices to rise to record levels over the next two years or so, this may be unlikely to occur this year. That said, building positions now on dips would be a good strategy for investors, mining companies, and others to benefit from the sharp upward move anticipated in silver prices in the medium to long term. Fabricators also should take such opportunities to hedge in advance of such price increases.

The fact that silver is not at record price levels while gold is may not be unusual. It is often said that silver prices lag gold prices in a typical gold and silver bull market. This is largely true, but prices do not always follow this pattern. Silver peaked in April 2011; gold peaked in September that year. The silver price lag has taken on mythic proportions that can obscure real-time market developments and trends for people who rely on mechanical formulae.

Various investors have already started showing increased interest in silver over the past two months. Silver exchange traded fund (ETF) investors, for example, purchased 20.1 million ounces of silver during March. While they were net sellers in April, the net sales at 4.3 million ounces were much smaller than the net purchases in March. U.S. Mint coin sales to dealers also have been strong and premia paid for these coins by dealers also have remained above levels seen prior to the pandemic, unlike in the case of gold.

Silver prices are expected to soften in the near future, driven in part by the expectation of weaker gold prices and in part due to seasonal weakness in precious metals fabrication and investor demand that often appears over the next four months.

Even so, silver prices have healthy support around the $25.90 level. If this level of support is broken silver prices could slip to $24.40 or even $22.75 or $22.00. Increased investor interest in silver, in anticipation of a blowout in prices, is likely to help prevent prices from sinking lower.

There is also the less likely possibility that silver prices do not sink over the next few months but instead move in a sideways fashion between $25.90 and $29.00.”