by Craig Hemke, Sprott Money:
Potential for Silver Price Upside in 2024
We’re now into the fourth quarter of 2024, and the prices of gold and silver are up significantly year-to-date. Gold continues to make new all-time highs while silver is trading at levels not seen since 2013. If these trends continue, how much higher might prices go?
Let’s focus on the silver price this week, as that’s the one that is still causing the most angst among precious metal enthusiasts. With gold at all-time highs, how long might it be before silver plays catch up and makes its own new all-time highs?
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Historical Silver Price Movements and Annualized Returns
First, some history. With a nod of thanks to Ronnie Stoeferle and his team at In Gold We Trust, check out the annualized returns for silver prices over the past fifteen years, beginning with 2009 and just after the paradigm-shifting year of 2008. The first thing that should catch your eye is the volatility. Years where silver moves less than 10% up or down are now pretty rare!
Other things you might notice:
- Regardless of your choice of fiat currency, the average annual gain is about 10%. Why? ALL fiats are devaluing at about the same rate.
- Down periods can really have an impact, as many of us experienced from 2013 through 2015.
- However, and be sure to note, big up years are usually not a one-off. 2010 followed 2009, 2017 followed 2016 and 2020 followed 2019. This portends well for 2025.
Key Resistance Levels for COMEX Silver
OK, so if we’re setting up for another solid year of gains in 2025, what price levels should we watch for as 2024 draws to a close over the next 90 days? Unlike the gold price, which is at all-time highs and in uncharted territory, the long-term historical price charts of silver can provide some clues. Let’s first look at the weekly chart and recognize that price has definitely broken out above critical resistance at $28. It has also completed a consolidation where it tested that same $28 level as support and now has broken through that formation as well.
Silver Price Forecast for 2025
And why was $28 so important as resistance and support? Check the chart below that covers the period of 2010-2013. Notice how the $28 level offered important support as a floor back then…which is precisely why that same level provided such important resistance in the period 2020-2024.
But now that $28 level has been decisively broken again…this time to the UP side! So where might price head from here? For that answer, let’s consult the long-term charts again.
For the just-completed month of September, the silver price closed at its highest level since January of 2013. That’s a good start. However, price still remains below the levels seen back in May of this year, so first and foremost, the spot price needs to break out above $32.50.
Once price moves above $32.50, the next major resistance level is going to be found in the area around $35. Why? Again, let’s consult the long-term chart. As you can see below, in the bounce back year of 2012, the silver price could never hold above that level. If it had, a move back into the $40s would have become possible. Unfortunately, we all know that the move never came.
However, that move sure looks like it’s coming in 2025 if, once again, the silver price strings together two strong years in a row. And why wouldn’t it, with fiat-weakening central bank policies and a global stagflation pending?
How high might silver trade in 2025? Well, your guess is as good as mine, but if we consult that long-term monthly chart again, I think you can make some forecasts by adding a few more lines of potential resistance. As you can see below, in 2025 we’re likely to first be watching $40-$42 and then $48-$50. Beyond there, silver gets into the new all-time high space that “big brother” gold currently occupies.
