Silver Price Forecast: Big Gains Ahead?

Saturday, February 25, 2017

silver bars

It’s no secret that the price of silver has accelerated upward this year, reaching new highs since December of 2016. But what should intrigue investors isn’t where silver has gone thus far—it’s about those other ten months of 2017, the ones that will determine whether we’re in a silver bull market or a silver bear market.

No one, not even investing experts, can say they have access to a crystal ball. But when it comes to the silver price, there is reason to believe that optimism is warranted. Let’s examine.

London Bullion Market Association Seeing Big Moves In Silver Ahead?

Money Morning came in with a report recently that detailed the results of analysts responding to a survey in the London Bullion Market Association. The results? The average prediction for gold in 2017 was a price increase of about 11%, with an average high of 14% or so.

As for silver, 20 out of 23 analysts took a bullish position on silver for 2017, which indicates a consensus optimism for the precious metal. Although these same analysts did see some risks for silver, such as the idea that investors holding ETFs (exchange-traded funds) of silver might look to “cash out” on the current gains, forcing the demand for silver and silver-related investments to drag slightly.

Is Silver Tracking Gold Right Now?

Thursday saw a bump in the price of gold, with the yellow metal ending up around $1,250. Early morning returns from silver didn’t see the same bump from silver, but still saw a similar increase. This leads to a specific question: is silver tracking gold?

Usually, silver and gold go hand in hand. Investors group them together as precious metals, for the most part, so what’s good for the price of silver is seen as good for the price of gold, and vice versa. But they are not the same thing. DailyFX believes that silver may even be looking to gold for some guidance as to where it might go.

Is this a real phenomenon? Overall, if you “zoom out” and watch the prices of both, you may notice similarities. But any time you’re looking for a definite link between two commodities, be wary of believing that a certain metal is headed to a specific price point.

Watching Silver Prices In 2017: What To Know

With silver prices headed upward right now, there’s every reason to believe optimism is the way of the year. But 2017 won’t be without its obstacles. One of those obstacles, analysts believe, is investors taking their money out of silver ETFs as they “cash out” on the recent gains. That provides something of an equalizing factor on the price of silver.

Other issues will be important to pay attention to as well, including the Federal Reserve’s approach to interest rates and the demand for precious metals. The stock market might be a weak indicator, of course, but it’s always good to watch the markets as a whole to get an idea for how other investors might be thinking. If gold and silver continue to act as a hedge, and confidence in stocks is high, it could put more downward pressure on the white metal. Even so, silver’s performance in 2017 thus far leaves every reason for optimism.

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Darren Capriotti

Darren Capriotti has been a market analyst for the past decade and is an expert in precious metals. He prides himself on his ability to analyze the market and offer true value to investors with questions about gold, silver, and other precious metals. Highly educated, incredibly passionate, and more accurate than most, Darren offers a true, unbiased look into what investors can expect in the precious metals market. You can reach Darren at dcapriotti@gold-eagle.com.