Anyone interested in investing has probably considered trading precious metals at some point. Gold is the traditional choice for precious metal trading, but buyers and sellers have had a lot of success trading silver. Like gold, the price of silver has an excellent track record throughout history, and silver can serve the same function as gold as a store of value.
So the big question for many is: What will silver be worth in 10 years? The team at Oxford Gold Group put together this article on the future price trajectory of silver as well as the pros and cons of investing in silver.
What will silver be worth in 10 years? Unfortunately, nobody can precisely predict how the price of silver will rise in ten years. Our modern economy is so complex that precise long-term predictions are not feasible with current models.
However, we can look at historical trends for silver prices and, allowing a few assumptions about the market, provide an educated guess about the demand for silver ten years out.
According to historical data, the price of silver reached a local high of $62.11 per ounce back in 2011 before falling to a much more modest $29.14 per ounce by the end of 2020. As of the current time of writing (May 2022), the price of silver has decreased by about 25% since 2020 prices and is at $22.37 per ounce.
One of the major factors explaining the 2010-2020 pricing slump for silver is a bearish commodity market for the past decade. In bear markets, asset prices typically fall as large holders sell off losing assets. This repeated cycle causes a chain reaction, which can cause commodity prices to drop from 50% to 90% of their value.
Assuming that bear market conditions continue across the next decade, it’s possible the price of silver could fall to as low as $2.50 per ounce in the worst outcome. Previous bear markets for silver show a similar trend. For example, between 1980 and 2000, silver prices fell from nearly $50 an ounce to just under $7 per ounce—almost a 90% loss.
Keep in mind that selling depreciated assets during a bearish market is not always the best idea. In most cases, bear markets eventually swing in the other direction, with prices rising again. For long-term commodity investments like silver, the best option might be to hold during a bearish market instead of selling.
In contrast, silver has experienced a handful of bullish markets over the past century, which have caused massive price spikes. Speculators buy lots of metals during bullish markets, resulting in increasing prices.
From 1970 to 1980, a bullish period for silver trading, prices rose from just over $1 per ounce to nearly $50 an ounce. This increase was primarily a result of the Hunt brothers, three siblings who managed to buy up almost a third (100 million ounces) of all silver reserves worldwide, an event dubbed Silver Thursday. The subsequent crash through the 1980s was due to COMEX heavily restricting commodity futures trading.
Silver prices also experienced a bullish run at the back end of the 2000s, just after the global financial crash. As the housing market started to fall through, investors parked their money in defensive commodities such as gold and silver, resulting in price jumps from $15 per ounce to nearly $50 per ounce—a +300% increase!
In both cases, silver bull markets manifested from prominent market actors buying future contracts for silver. These large runs also took place during periods when traditional economic vehicles were losing value, such as the 2009 recession.
So what will silver be worth in 10 years? Assuming these same kinds of returns and a bullish market, ten-year predictions for silver prices can be anywhere between $60 per ounce to over $600 per ounce.
Generally speaking, rising prices are a good sign. However, if prices rise too quickly, it could mean the market is a speculation bubble ready to pop. For instance, if gold prices rise to the $600 figure above, it could be a sign of hyperinflation and an impending crash.
What will silver be worth in 10 years? There is one other scenario that could have a drastic effect on the price of silver. Hyperinflation from strained supply chains and the public deficit could cause the value of the US dollar to fall drastically. In this case, silver would be an excellent store of value when traditional fiat currencies fail.
Unlike fiat currencies, there is only a finite amount of silver on the planet. That means that it is highly resistant to specific inflationary pressures. Additionally, people throughout all history have utilized gold and silver for trading. In a post-fiat environment, silver and gold might become the standard for monetary trade once more.
Fortunately, buying silver is very easy. All you need to do is find a distributor of physical silver coins and bars. Dealers can take your fiat currency and send you an equivalent amount of silver. Most dealers provide gold and platinum products in addition to silver products.
There is also the option to create a gold/silver IRA. With gold and silver IRA, you can invest your money in physical metals and have them grow in value tax-free for your retirement. An IRA with precious metals is a good hedge against economic downturns and is a way to set yourself up for the future.
You can also get into the silver trade through silver options and futures contracts. These kinds of derivative financial products give you the right but not the obligation to buy or sell silver assets at a specific price. Through these kinds of vehicles, you can speculate on the future prices of silver to earn even more money.
Like all commodities, investing in silver carries some risks. Below are some of the pros and cons of investing in silver as a commodity.
One of the biggest reasons to invest in a physical commodity like silver is to hedge against inflation. Unlike fiat currencies that governments can print, there is a finite quantity of silver. As such, it is less susceptible to losing value from inflation. Generally speaking, silver is less volatile than traditional securities.
Stocks and bonds are intangible assets because they represent abstract ownership of an entity, not an actual physical object. Tangible commodities like silver and gold are material items you can hold in your hands.
This physicality means that silver does not need maintenance or a digital infrastructure to sustain it. If the entire digital ecosystem failed tomorrow, you would still have all your physical silver safe and secure.
Gold is traditionally the best choice for commodity investing but is typically much more expensive than silver. Silver makes a cheaper alternative to gold and has much of the same beneficial investment properties.
In fact, gold and silver prices share a tight correlation. So if one goes up, it’s likely that the other will too. If you have a limited amount to invest, it may be a more conservative option to invest in silver rather than gold.
Another positive benefit of investing in silver is it diversifies your investment portfolio. Most financial experts recommend that you spread investments over a wide range of industries and asset classes.
A diverse portfolio is less resistant to downturns because your wealth doesn’t sit all in one place. If some of your investments do poorly, your other assets will pick up the slack. In that sense, commodities like silver make a great addition to your portfolio.
Silver is both a precious metal and an industrial metal necessary for manufacturing. As such, the demand for silver comes from multiple sectors of the economy, keeping pricing relatively stable. You can also use silver as a currency.
So what will silver be worth in 10 years? It’s difficult to say for sure. In at least two of the three scenarios mentioned above, purchasing silver could be a great idea. Silver bull markets could see rapid increases in the price of silver, and in hyperinflationary environments, silver could become an important medium of exchange.
Even in a bearish market for silver, buying can be a good idea. Silver prices, like gold prices, fluctuate over time, with peaks and valleys in the price. Whenever there is a price fall, you can expect a price increase in the future. Falling prices can be a good sign to get into the precious metal trades to ride the future price increase.
Oxford Gold Group has years of experience providing high-quality gold and silver investments for our clients. Our goal is to protect your financial future with the best in precious metal ingots and coins.
INSIDE THIS INVESTMENT GUIDE YOU WILL LEARN:
• How Gold & Silver can protect your savings & retirement accounts
• Types of Gold & Silver products available for Home Delivery
• How a Gold & Silver IRA can protect your Retirement account