Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Price Rockets to Multi-Year Highs, Targets $169

Commodities / Gold & Silver 2020 Aug 19, 2020 - 03:40 PM GMT

By: Jason_Hamlin


After nearly 7 years of consolidation and mostly sideways trading, the silver price is finally experiencing a powerful breakout. It did not take long after breaking above the psychologically-important $20 level for silver to climb another nearly 50% toward $30 per ounce.

The silver price has since corrected by 11% to the current price of $26.40, but remains up more than 45% in three weeks. Remarkably, silver is now up more than 125% from the March lows and we see significantly more upside ahead.

How High Can the Silver Price Climb?

The last major bull cycle propelled the silver price 12.5x higher from lows around $4 to roughly $50 per ounce. If we use the late 2015 bottom as a starting point and project the same magnitude of gain, silver is forecast to hit $169 by the end of 2025.

We forecast the silver price will climb toward $50 by the start of 2021, $80 by the start of 2023 and climb above $100 by January of 2024 en route to a new inflation-adjusted high above $169 by the start of 2026.

This is based on an analysis of past silver bull markets. But these estimates may prove too conservative. Silver is liked a coiled spring that has been held down for nearly a decade and is finally set free to rise. Some analysts believe JP Morgan, historically one of the largest paper shorts in the silver market, may have finally exited this trade and stepped aside.

But the larger driver of silver’s gains is no doubt the trillions in new money (debt) created by central banks in the past four months. Globally the estimated stimulus thrown at keeping markets afloat during the pandemic is approaching $10 trillion. This is an unprecedented amount that is multiples of the stimulus efforts put in place following the financial crisis of 2008/09.

The staggering thing is that our central bank saviors are just getting started, with a second multi-trillion stimulus effort underway in the United States and EU leaders striking a $2 trillion deal to rebuild Europe’s economy.

Here is an incredible statistic to put the magnitude of current debasement in perspective: The United States printed more money in June than in the first two centuries after its founding. Let that sink in.

And yet an estimated 27% of adults in the U.S. missed their rent or mortgage payment for July. This number will only get worse in August and the FED has committed to doing ‘whatever it takes’ to avoid a deflationary tailspin.

So, there is no end in sight for the currency debasement that is taking place. Compounding matters, 71% of the government debt issued this past year matures in less than 12 months and the amount of Treasury Bills outstanding shot up to $5 trillion recently.

The FED balance sheet is exploding higher and has nearly doubled from around $4 trillion prior to the pandemic to over $7 trillion today. It has taken a breather after the huge move in April/May, but is set for another leg higher over the next few months.

Even if the scientific community were to find a miracle cure for Covid-19 that allows economies to re-open fully, the damage (to fiat currencies) will have already been done.

It is therefore no surprise that Fitch Ratings revised the United States Credit Outlook To “Negative.” And we’ve seen that U.S. consumer prices rose more than expected in July, with a measure of underlying inflation increasing by the most in 29-1/2 years amid broad gains in the costs of goods and services.

Yes, velocity of money has declined, but we believe central banks will have a harder time keeping inflation in check this time around. More of the new money created is directed at small businesses and consumers to maintain jobs, as opposed to financial crisis funds going directly to banks that used the money to shore up their balance sheets.

At any rate, we believe that a new bull cycle in precious metals has just begun. We recently predicted that gold would climb above $6,000 per ounce during this same bull cycle that takes silver toward $169/ounce. This would give us a gold-to-silver ratio of 36, more in-line with historical numbers and closer to the actual ratio of metals in the earth’s crust.

What is Next for Silver?

The short-term chart shows the recent pullback to support around $24 and a small bounce. We think there are decent odds of this support holding. But if it fails, the next key support zone is between the trend line at $21 and the 50-day EMA around $22. This $21-$22 zone is stronger technical support for silver with a high likelihood of holding.

It is also worth noting that the RSI momentum indicator has dropped from overbought levels around 88 to neutral levels around 59 currently. This resets the bull cycle for another potential leg up before becoming overbought again. Of course, there is the potential for a deeper drop in the RSI to oversold levels at or below 30. But during breakout bull cycles fueled by record levels of money printing, we can expect short corrections with the RSI never hitting oversold levels.

Silver Miners – Where is the Leverage?

Silver is up 47% YTD, outperforming the Global X Silver Miners ETF (SIL), which is up 42%. So, where is the leverage?

A handful of junior silver explorers have generated incredible leverage to the price advance in silver in 2020. We hold three silver stocks in the GSB portfolio that are up 226%, 202% and 157% year to date!

But not all junior silver explorers have generated triple-digit returns this year or have managed to outpace silver. Several of these companies that we track have been trending alongside silver without offering leveraged returns yet. But they have near-term catalysts that we believe will propel them to powerfully-leveraged returns over the next 6 to 12 months. Among them are two of the highest-grade silver mines in the world about to move into production.

Researching and identifying undervalued junior mining stocks is a key area of focus for the Gold Stock Bull newsletter. If you would like to receive our investment research, model portfolio, trade alerts and more, you can get started by clicking here.

We also offer a new chat room with daily news, charts, trade ideas and discussions as part of our all-access Mastermind Membership.

By Jason Hamlin

Jason Hamlin is the founder of Gold Stock Bull and publishes a monthly contrarian newsletter that contains in-depth research into the markets with a focus on finding undervalued gold and silver mining companies. The Premium Membership includes the newsletter, real-time access to the model portfolio and email trade alerts whenever Jason is buying or selling.

Copyright © 2020 Gold Stock Bull - All Rights Reserved

All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. The information on this site has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any information on this site without obtaining specific advice from their financial advisor. Past performance is no guarantee of future results.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in