Silver will move higher in 2023 because we expect the top in the US Dollar to be confirmed. Moreover, our silver price forecast 2023 is supported by leading indicators like inflation expectations and the silver CoT report (silver futures market positions). They all suggest a strongly bullish 2023 for silver. That’s why our silver price forecast for 2023 is 34.70 USD. Note that this is our first bullish target, also a longstanding target that we expected to be hit in 2022. Once silver trades near 36 USD it will be a matter of time until it will attack ATH. In our gold forecast 2023 we mentioned that our preference goes to silver investments in 2023 and beyond. We also tipped silver as the precious metal to buy for 2023.
[Ed. note: This silver price prediction was originally published on October 8th, 2022. We make adjustments to this article to keep it current, any change is prefaced with the date on which the change was published. For instance, we added one section on November 27th featuring 2 data points that underpin our bullish silver market outlook. Also, on December 25th, we added a few more charts comparing the current silver chart setup with the chart from Tesla right before it exploded.]
Chart updates: We updated all charts in this forecast to keep this article current on December 4th and on January 23d, 2023.
New insights: We published an article on January 22nd, 2023 which outlines the 4 Structural Changes In the Silver Market That Confirm The Start Of A New Secular Bull Market. It is a summary of recent developments, at the start of 2023, that occurred right after we wrote our silver price prediction (Oct 2022). We were not in a position to identify those structural changes at that point in time. However, those additional data points confirm what we saw happening on the charts when we wrote our silver prediction 2023.
Silver prediction summary: We want to re-iterate our bullish stance about the silver market. Our silver price targets for 2022 were almost met but the big decline in commodities and surge in the USD, induced by the Fed’s sudden change, prevented silver to move to our bullish target. Our silver price target stands strong, the fact our silver prediction was not hit in 2022 implies that it is postponed to 2023 and beyond.
Another Silver Price Prediction: Why?
The internet has no shortage of silver price predictions. In fact, InvestingHaven was the first back in 2014 to publish a silver price prediction and repeat it every year. Since then, the number of silver price predictions has exploded. Most of them are absolutely worthless.
We pride ourselves not only being the first one to publish a silver price prediction but also do it in a very diligent way, backed by thorough research.
But there is more.
What we are really interested in is catching the next really big move in silver that might bring it back to 50 USD/oz or even higher. That’s the reason why silver has a top spot in our watchlist.
We write a lot about silver both in the public domain (silver tag) but also in our premium services. Silver has a track record of running very hard and fast, in both directions. There is a very good reason why silver is called the restless metal.
Silver came very close to a secular breakout in 2022, however the breakout was stopped cold by very aggressive (read: historic) monetary policy interventions in Q2/2022. Once the wave of monetary policy interventions will be over, which we ultimately expect as 2023 kicks off, we see the USD come down. This will make the silver market explosive!
4 leading indicators supporting our silver price prediction
We work with a limited number of leading indicators for our silver price predictions:
- The price of gold (positively correlated to silver).
- The Euro (inversely correlated to the USD).
- Inflation expectations (positively correlated to silver).
- The futures market positioning (CoT).
In 2022, we noticed how a strong rise in the U.S. Dollar and consequently big decline in inflation expectations broke the secular breakout in silver that started in Q1. However, the silver CoT report continued to improve to the extent that it became historically bullish in Q3.
We believe that all leading indicators will turn bullish for silver in 2023.
Our silver price prediction 2023
We turn to the silver charts to support our silver price forecast 2023.
As seen on the longest timeframe, the silver price chart over 50 years, there is a giant cup and handle in the making. This is a strongly bullish pattern, one that might take two more years to truly explode.
The area in green is the ‘handle’, it took some 6 years to create the first part of the structure. The consolidation is taking some 3 years now. We find it challenging to estimate the exact time required for this formation to complete. We can reasonably expect silver to move to the top of this formation (between 32 and 36 USD) in the 2nd half of 2023.
Silver charts that support our forecast
We start with the weekly gold to silver ratio over 50 years.
We explained the following in our public post One Silver Chart Justifies ‘Buy The Dip’ For Long Term Positions:
The gold to silver ratio says that silver is a screaming buy: the gold to silver ratio over 50 years! Take a look at the green line: any time, in history, silver achieved a ratio of 92:1 when compared to the price of gold, it started an epic turnaround. In some cases it took a few years, in other cases a few months, for silver to become explosive!
The gold to silver ratio chart over 50 years:
The 2nd chart that supports a higher silver price in 2023 is the correlation between inflation expectations (TIP), gold and SPX.
The decline in 2022 in all 3 of them is telling. We expect that all 3 of them will stop declining and turn up in 2023, and it should happen not later than March of 2023 (presumably much sooner). We explained this in: Why Markets Should Resume Their Uptrend The Latest In March of 2023.
With the correlation between those 3 markets in mind, we look at the current setups in silver / TIP / SPX.
Silver is setting a very strong inverted head & shoulders pattern, stocks are setting a double bottom (pending validation though), TIP looks to be consolidating.
We believe all 3 instruments will move higher in 2023.
Silver’s leading indicator #1: Gold
We expect gold to eventually move higher in 2023 because of the divergence between its leading indicator M2 (the monetary base).
We gave much more detail about the expected path of gold in 2023 in our gold forecast (link in the intro of this article).
Silver’s leading indicator #2: Euro (USD)
Precious metals need a rising Euro (falling or flat USD) in order to shine.
If we look at the Euro chart on the longest timeframe we find 2 bearish targets: 0.9666 and ultimately 0.91-0.92. The first one was hit, the second one might be hit (or not).
Stated differently, even though it might be that the U.S. Dollar has more upside (more downside in the Euro), we believe that there is more downside risk in the USD than upside potential. Pending validation and an important pre-requisite for our bullish silver price forecast 2023 to materialize.
Silver’s leading indicator #3: Inflation expectations
Inflation expectations are positively correlated to precious metals. They are a very strong a leading indicator, certainly when combined with the USD/ Euro effect.
The long term setup in TIP seems to be hitting a multi-decade low in the context of its rising channel. Can TIP move lower? While everything is possible, we see that the recent decline was equally large as the previous ones in 2008 and 2020. That’s why we believe TIP is about to start a consolidation and move higher in 2023.
The medium term chart of silver / SPX / TIP, shown below, makes the point: a turning point in all three markets is not far away. All three should resolve higher in 2023, even if they decide to continue their downtrend before 2023 starts.
Silver’s leading indicator #4: Futures market (CoT)
This is the most bullish leading indicator for silver, way before 2023 kicks off. This leading indicator will act like fuel in 2023 whenever the other leading indicators turn bullish for silver!
The way to think of this leading indicator for silver is a stretch indicator:
- When net positions in the futures market of commercials and non-commercials are stretched it indicates that price is going to take a turn.
- This is not a timing indicator, we need the silver price chart to determine the timing of a turning point.
- Right now, as per the data on the center pane (blue and red bars) we see that commercials and non-commercials have extremely low net positions, historically low. This is a setup that supports rising silver prices.
- What we want to see in 2023 is the red and blue bars rising not so fast as the price of silver is moving towards 28 USD, the secular breakout point.
We recommend reading Ted Butler’s work who is the expert in reading the CoT report in silver. He also explains how price setting in the silver market is dominated by CoT. He is a lonely voice in pointing out how tight the physical silver market currently is, as we head into 2023, because of an epic turnover in physical silver warehouses.
Comment added on January 23d, 2023: The silver CoT report remains unusually bullish, especially given the surge in price from 18 to 24. While a pullback is very likely, the more important thing is that the CoT as a stretch indicator does not indicate that the silver price rally is stretched, on the contrary.
Physical silver market: physical shortage in 2023
Editorial note: This section added on November 27th, 2022.
As discussed in Silver: A Divergence Of Epic And Historic Proportions there is a shortage developing in the physical silver market. Source: Global Silver Demand Forecast to Reach a Record High in 2022.
According to The Silver Institute) the global silver market should record a deficit in 2022. “At 194 Moz, this will be a multi-decade high and four times the level seen in 2021.”
As seen on the table which depicts the supply/demand situation in the last 10 years, it becomes clear that 2022 will be year with an epic physical market shortage. The strength of the physical shortage is the one conclusion that stands out, see red annotation.
As said, “this physical market imbalance (supply shortage) is historic, it’s not just a big supply shortage jump of 4x against last year.”
Silver price chart: a bullish reversal is almost complete
Editorial note: This section added on November 27th, 2022.
We use the daily silver price chart from Finviz, not a logarithmic chart, without annotations.
What do you see?
A very, very bullish reversal setup. The 21.50 to 22.00 USD level comes with resistance, the 19.00 to 20.00 USD level is support. But, more importantly, the entire structure between 18 and 22 is one giant bullish chart structure!
Silver price forecast 2023: conclusion
That was a lot information to take in, so let’s ensure we get to a very clear and simple conclusion:
- Leading indicators Euro and inflation expectations turned bearish in Q2/2022, pushing silver lower.
- The silver CoT turned extremely, historically bullish as we head into 2023.
- Once the Euro and inflation expectations start rising, we silver see taking off.
That’s why we see silver easily moving to 28 USD in 2023 and moving to our first and longstanding bullish target of 34.70 USD. Our silver price forecast 2023 is 34.70 USD. Whatever happens at that price point will inform us about the intention of silver to attack ATH, presumably beyond 2023.
Investors looking for exposure in the silver mining space might find value in this comprehensive article: our silver stocks outlook for 2023.
Bonus chart: Silver and Tesla comparison
Every investor talks about the big Tesla opportunity of recent years. If you would have invested in Tesla back in 2017 or 2018, had done nothing for a few years, your position would have exploded.
Here is the problem: Tesla first sold off before taking off. Most investors sold on fears that Tesla would start crashing.
Interestingly, there are similarities between the Tesla setup back in 2019 (before it exploded) and the silver price as we head into 2023.
Tesla’s daily chart between 2013 and 2019 was a ‘hot mess’. It spent 9 months below its 200 day moving average before it tested the support area. In doing so, the price of Tesla went from 25 to 12 in some 6 months. Not a lot of investors were holding those shares.
Technical analysts would have told you to run for the hills.
Fast forward to today and look at the silver price chart.
Well, silver concluded 9 months below its 200 day moving average after it came down from 27 to 17 USD/oz. It spent several months right at its 2017/2018/2019 highs and it looks like it successfully confirmed it as key support.
Now, here is the point: if you ask any investor today if they would have held their Tesla shares even if they would have sold off but got in return a 10x ride, the answer unanimously would have been ‘yes’.
The reality is different: most sold their Tesla shares back in 2018 & 2019.
If you ask any investor today to consider silver, they would tell you it’s only a fool that is investing silver because, among other reasons, (a) rates are too high (b) the USD is too high (c) the world does not care about silver (d) silver has gone anywhere in recent years (e) silver is too volatile (f) silver came down so much. Note that this list is not exhaustive.
You got our point: if the big silver move is about to start in 2023, which we firmly believe is the case, you MUST be in an environment characterized by disbelief in the investment. Because if there were too much belief in silver as an investment, there would be no opportunity.
You got our point?
Please read this a few times, it’s crucial, timely insights, we explained more of these principles in 7 Secrets of Successful Investing.
Silver price prediction – 2023 log
This is a log of our silver price prediction that we’ll update multiple times throughout 2023, ideally twice per month:
- 2023 kicked off in a modest way. The silver price chart looks good as a long term reversal. However, short term, silver is getting vulnerable to a pullback. There are also 2 conflicting forces at work: 10 year yields seem to be topping (good for silver) while the USD seems to be bottoming (not good for silver).
- We believe silver needs a consolidation period of a few months before it can really attack the 28 area (with sufficient power to break through it).
- Silver it taking a short break. It is prone to a pullback to the 21-22 area. We don’t think silver should be shorted, nor sold. We expect a healthy pullback which should make the long term reversal even more constructive. It is a ‘buy the dip’ pullback. As explained in this article Silver: Here Is Why February 15th, 2023 Really Matters we identified 02/15/2023 as a date which might come with decisive price action.
- Now, suddenly, the world is waking up to the potential of silver. Even in mainstream financial media we start seeing bullish silver price headlines like this one on CNBC Silver could touch a 9-year high in 2023 — with a bigger upside than gold.
- Next log update scheduled for February 2023.
Our track recording predicting the price of silver
For 5 years in a row our silver forecasts were phenomenally accurate. They are all still available in the public domain on our blog, and the table below depicts the summary of each year’s silver forecast with the highs/ lows per year.
Interestingly, InvestingHaven’s research team has been spot-on with its gold price forecasts for 5 consecutive years. However, in 2021 and 2022, the price of silver came close to our silver forecast but eventually did not materialize.
We firmly believe that our silver price forecasts of 2021 and 2022 will materialize in 2023. Our longstanding targets are 34.7 and 40 USD, they should be met and probably exceeded not later than 2024.This is an overview of our silver price forecasts from last year. We publish these forecasts many months prior to the year that we forecast. Prices reflect silver's spot price.
|Year||Our silver forecast||Lows|
|2017||Neutral, price target of $15||14.41|
|2018||Neutral, no breakdown||13.91|
|2019||Bullish with price target of $20-21||14.30|
|2020||Bullish with price target of $22||11.65|
|2021||Bullish with price target of $37||21.42|
Our #silver price forecast for 2023 is bullish with a price target of 34.70 USD. Silver's leading indicators will turn strongly bullish in 2023. We see $SILVER and $SLV attacking ATH not soon after 2023. Click To Tweet
Follow our premium service covering silver investing
In our premium service Momentum Investing, we published 2 special editions on the silver market and silver stocks:
- On Dec 2nd we wrote The Silver Market Long Term Very Bullish. Our Silver Mining Top Picks for premium members.
- On Dec 18th, we wrote Portfolio Updates And Top 10 Silver Stocks with our top 10 silver stocks featuring producers and the best silver juniors.
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