There is often a tendency to lump all the precious metals together when examining their market performance, a proclivity that often extends to the broader commodities market.
The inverse ratio that exists between the value of the U.S. dollar (USD) and the prices of commodities that are quoted in USD can of course not be ignored. Many of the fundamentals also affect the different classes of commodities in a similar fashion, but there are always individual factors around specific commodities that can affect their value. Technical analysis can also result in very different expectations with regard to the market behavior of different commodities.
A perfect example of this is that during the rout of the gold price just over a week ago, silver escaped relatively unscathed. Some analysts put this down to the fact that silver is already very depressed, but the counter here is that the same hold good true for gold.
Analyst Avi Gilburt, an acknowledged expert on Elliott Wave market analysis, suggests that silver has a very bright future over the medium and long term.
Making use of the Elliott Wave technical analysis methods, he arrives at the conclusion, which he himself labels as “outrageous”, that silver will be heading for the $1,000 an ounce region within 50 years. He arrives at this figure by using the same methodology used to identify tops and bottoms in forecasting gold values.
His shorter term forecast over the next three to five years is for the price of silver to be heading back up to the $40 - $50 region. The 15 year forecast is for the precious metal to increase by 10 or 15 times the price at which he expects it to bottom in the near future. The final drop should end with silver finding support at the $11 level according to Gilburt.
He agrees that while a number of investors might not be around to check his 50 year forecast, silver is a good investment opportunity for those who expect to be around for at least the next five years.
His ends with the comment, “it is quite a high probability that silver will be appreciably higher by 2020 relative to where we now reside in 2015. So, let’s take this one step by step.”
An analysis from Kitco, dated 27 July, rates the metal as follows, “Silver is a trading buy here with a stop beneath Friday’s (24 July) intraday low” which was $14.33 an ounce.
MT4 Chart: Silver