Silver Prices Are Going Up in 2018
Where are silver prices going? Are silver prices going up or down? Amid the massive risks that could stir turbulence in the equity markets and the new fad, Bitcoin, why worry? Some traditional sources of investment, which have represented the very concept of wealth and security, still have plenty to offer. Gold is one. But silver offers you a relatively cheaper entry into precious metals trading.
Will silver prices increase in 2018? There’s no such thing as a crystal ball, but all indications suggest it’s a good time to consider silver. There’s no need to lose sleep over the question, “Are silver prices going up?” They are. From last Christmas to January 24, 2018, silver prices have increased from $16.40 to $17.47. That’s an improvement of almost seven percent.
Granted, some stocks and cryptocurrencies have shown bigger gains. But they could also fall harder; in some cases, they could even wipe out all your savings. There’s little chance that anyone will lose the totality of their savings by investing in silver.
It’s true that prices have not yet recovered since the $47.90 set at the peak of the commodities boom in April 2011. Unlike commodities-based stocks, like certain mining industrial companies (and other stocks), silver still has a substantial price and value.
Consider the ill-fated rare earth miner Molycorp Inc (OTCMKTS:MCPIQ); it peaked at about $80.00 per share. It has long stopped trading after shares fell to a price of mere cents.
The Silver Price Forecast
Will silver prices increase in 2018? Yes, also because of the overall and economic context that is lifting the tide for all metals. Many factors will drive precious metals in 2018. Some of these are being ignored by the public and analysts alike.
The dollar is foremost among the mainstream’s miscalculations. Rather than moving higher because of the expected inflation and the Federal Reserve’s response, interest rates will not rise three times, as Janet Yellen and the Fed had expected. Her replacement as Fed chair, Jerome Powell, is dovish and inclined more toward maintaining the current 1.5% than risk a market implosion with another hike, or series of hikes, in 2018.
Sooner or later, the stock market will start to reveal its Achilles heel. Equity prices are at record levels and beyond. The tax cuts have already been priced into the value of many stocks, thus they can’t move much higher.
With every step that investors take to push the Dow Jones beyond its already unsustainable heights, the risk of a crash or a significant correction increases. Silver will be the most accessible refuge for investors’ savings once the financial walls start crashing.
Note that the Federal Reserve is justifiably reluctant to push for higher rates. There’s no clear signal at which point a rate hike could prompt a recession. A recession in the post-“Trump tax” climate, with fewer funds for social welfare or “social shock absorbers” could spark social unrest, given the galactic income gap that persists in America.
The last time the U.S. went into recession was when the Fed raised rates in 2005, peaking in 2006. That caused the many who bought sub-prime mortgages to no longer be able to afford their homes. The only solution was a rate cut, which no doubt contributed to the commodities bull market that peaked in 2011. Thus, the answer to the question, “Will silver prices increase in 2018?” and similar questions is all but certainly “yes.”
Will Silver Prices Rise?
Silver is still there. It will be there even in the event of a massive catastrophe. The silver price forecast for 2018 is favorable. Should it continue to move at even a quarter of the current pace (just over one percent a month), silver prices could well end up in $20.00-per-ounce territory this year.
Indeed, even some of the big banks are banking on a favorable silver price forecast for 2018. TD Securities Inc.—a Canadian institution, which implies expertise in the metals market—expects silver to reach $20.00 per ounce, which represents almost 20% over the 2017 high. (Source: “2018 Commodity Outlook,” TD Securities Inc., November 2017.)
Chart courtesy of StockCharts.com
That alone should make silver a shining target for investors looking for something safe and profitable. To put it another way, investors cannot ignore silver in 2018. Its price is heading toward $20.00 per ounce, which has been the ceiling, or barrier, since 2016. Compared to gold, moreover, TD analysts expect silver prices to be less volatile, which produces greater profit potential. (Source: TD Securities Inc., op cit.)
Gold, of course, also represents a safer investment than stocks in 2018. But silver has the advantage of having taken a heavier beating over the past few years. Therefore, it has more room to gain. Or, in the vernacular, it’s undervalued, especially considering the variety of its industrial and decorative applications. From jewelry to tableware to photography to electricity, silver is essential. Most electronic switches use silver, so cheaper metals or synthetic materials cannot replace it.