Silver price forecasts and predictions for 2014

Silver prices have taken a beating over the past two years. Will 2014 be the year when they finally break free again?

2013 has been a rough year for silver. Prices for the precious metal have fallen nearly 30 percent when they opened trading in January around $31 an ounce to today’s price of roughly $22 an ounce. It’s the definition of a bear market. We’re seeing a series of lower higher and lower lows that’s best illustrated by looking at an annual chart for the white metal:

Numerous factors have been working against the metal this year. Specifically:

  • Lower-than-anticipated inflation.
  • Economic growth in the U.S.
  • The likelihood that the Federal Reserve will soon start tapering its aggressive bond-buying program.
  • Economic uncertainty in China and the Euro-zone, which strengthens the dollar.

And yet, I remain convinced that the U.S. faces significant inflation and higher interest rates in the future, and that could lead to yet another surge in the price of precious metals, commodities, and perhaps even Bitcoin (check out my post on How to buy Bitcoin). I’m not alone either. While there are bears out there, a lot of forecasters are predicting higher silver prices in 2014 and beyond. Let’s take a look at the top 2014 silver price predictions:

  • $60 an ounce in 2014: So says MoneyMorning writer Tony Daltorio who expects prices to close out 2013 somewhere near $40 an ounce (something I’m skeptical of).
  • $36 an ounce in 2014: Silver is undervalued at today’s prices says Steve Nicastro at SeekingAlpha. He bases his assessment on the gold-silver ratio. “A conservative estimate of the gold:silver ratio at 35:1 would put silver at $36 an ounce at the current gold price,” he writes. “With gold at $1,500, silver would sit over $42 an ounce. With gold back at the 2011 highs of $1,900 an ounce, we could see silver top $54 an ounce, or higher.” Look for next year’s gold prices to see if and when silver is over- or undervalued.
  • Look for “record silver prices within the next 10 years.” It’s not a very helpful forecast, but that’s what the CPM Group is forecasting. They’re staking their prediction on increased industrial demand for the metal.
  • $21 an ounce in 2014: That’s BMO Research‘s forecast for the average silver price in 2014. They even revised that higher from $18 an ounce in October. Wow. Talk about being bearish. It’s almost enough to turn me into a contrarian.
  • Look for a surge in metals prices “late in 2014” according to Thomas Paterson. Paterson argues that household deleveraging has kept inflation tame. Once the average American has paid down enough of their debt to start making substantial purchases, inflation will grow rapidly as money velocity speeds up. Gold and silver prices will surge as that happens, Paterson believes. He argues that late in 2014 will “be time to bet the ranch on gold.” I’m extending his argument to silver, too, though I would never say you should “bet the ranch” on any single investment.
  • $27 to $28 an ounce in Q2 2014: That’s the latest prediction from Victor Kerezov. Kerezov believes silver prices will remain muted through the first quarter of 2014.

Of course, there needs to be a reason for silver prices to move higher. Specifically, we need a catalyst – some pronounced trigger or indication that it’s time to start buying metals again. Those triggers could include:

  • An increase in economic stimulus from the Federal Reserve or congress.
  • A sudden jump in inflation.
  • Short covering (buyers who are betting against silver start covering their bets).
  • Growth in physical demand or a supply shortage due to mine closures. The solar industry, for example, could drive increased demand for physical silver.

Once any of those triggers are hit, the rest could follow quickly and we could see a surge in silver prices reminiscent of 2011.

Why silver investors should stay away from silver coins

There is nothing wrong with collecting coins if you ARE ALREADY A MILLIONAIRE. If you are not then you need to sell your coin collection right now to the highest bidders.

-Posted by Alejandro Guillú Mendoza

Introduction

This article tries to explain in a simple way to readers without a college degree in economics or finance some macro economic factors that are currently changing the global supply and demand of silver.

Ground rules

Silver coins ARE NOT INVESTMENTS. Silver coins are still minted by countries to satisfy the unlimited demand for numismatists around the world. When you acquire a silver coin you are not only paying for the precious metal itself but also for the graphic design and for the minting.

Countries make billions of dollars each year buying silver by the ton and reselling it as coins.

There is nothing wrong with collecting coins if you ARE ALREADY A MILLIONAIRE. If you are not then you need to sell your coin collection right now to the highest bidders.

The problem with silver coins is that you need to pay for insurance each year and that cost eats some of your profits.

If you want to invest in silver then you need to buy either a silver mine or the ETF SLV. There are other financial instruments for more sophisticated investors that I am not going to cover in this article. If you want me to write about them then drop me a line.

Does Apple buys a lot of silver?

Silver is the best conductor for electricity, and in some cases the cost is not as important and it is used instead of copper which is cheaper (i.e. for small, complex electronics). One easy way to predict if we will buy more technologically advanced things made with silver is to closely watch the global GDP. If the world is expanding then it is likely that we will build more expensive things made with silver.

You can read the World Economic Outlook published by the IMF.

If you want to invest in silver, then you need to keep an eye on the price of copper because this metal is used only because silver is too expensive. If the price of copper starts to rise too much, then some companies may just decide to switch to silver.

Obviously, this is just a theoretical point. In reality, Chile, Peru, Argentina, Brazil and Mexico won’t let that happen, and they will just lend billions of dollars to publicly-traded copper mining companies to keep the price of copper low.

Digital cameras for everybody

Silver nitrate has always been used for photographs, and over half of all the silver mined was used for this before the digital camera was invented. This number is getting smaller and smaller every year, and one day we won’t use silver nitrate anymore. That would increase the number of silver available for other industrial uses bringing down the price of silver in the future.

If you are a politician in a country with a very limited supply of silver, then you need to reduce the demand for silver nitrate in your country as much as you can with the expansion of access to digital cameras to the general population.

Let companies like Nikon, Olympus and Canon import digital cameras without paying any taxes.

Allow these companies to issue Visa, MasterCard, American Express, Discover, UnionPay and JCB credit cards to buy their digital cameras insured by the government.

More than 90% of the world’s silver is produced in Mexico, Peru, China, Australia, Russia, Chile, Bolivia, Poland, the United States and Canada. If these countries reduce their own consumption in silver nitrate, then they will have more silver for export.

As you can see, the price of silver is not really about finding more silver mines but about finding smarter ways to use LESS SILVER.

What is the Protect our Silverware Act?

Most people with silver jewelry, silverware or silver coins are wealthy, and they don’t lose any money every time a burglar enters their house because they’re reimbursed by insurance. The rest of us are hurt by the insurance companies because every time they write a check to pay for these crimes, they increase the bill for all of us.

If less silver is stolen then the prices we pay to protect our homes will be reduced over time.

It is a known fact that burglars only steal from you when you are not home. A very popular trick among thieves is to call everybody until you get an answering machine. I strongly suggest you to get rid of your answering machine and just reroute your old telephone to a cell phone answered by one of your employees in China, India, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh, Russia or Mexico.

You can hire one on Elance for just a few cents per hour.

I propose a new law that will force any silver seller to register every silver buyer into a national database and each silver holder will be forced to hire a silver sitter when they are not home.

Let’s say that you are going to leave town for a few days on business. You call the Silver Police and they will send you an employee that will stay in your home for a few days until you return. Each silver holder will pay a “Silver Police Tax” each time he buys something made of silver to pay for this new Police Department.

This will reduce crime among families holding silver and will also reduce unemployment.

Conclusion

I believe these 10 countries will enact new smarter laws to keep the domestic supply of silver very tight and will also increase silver exports to other least developed countries with more loans to small businesses exporting jewelry and mirrors and other clever measures like a silver stamp that you can use to ship any item made of silver to an eBay or Amazon buyer in another country.

Top 10 silver price predictions for 2013

Where have all the silver bulls gone? Price predictions for the white metal are all over the board in 2013.

Posted by Alejandro Guillú Mendoza.

Many people around the world want to know the answer to the question, “Where is silver going?”

I invested several hours browsing the Internet searching for answers to save you time and money (because time is money, after all). Have another financial question? Drop me a line. Please don’t ask me where your lost kitten is or why she left you. Ask me about topics that can make you money, like silver!

Here are my findings on the latest silver price predictions for 2013, 2014 and beyond. The prices are sorted from low to high:

1) $26 Barclays according to CommodityOnline

Barclays believes strong production growth in mining will knock silver prices down and keep them low in 2013. “We expect it to grow to 25.2kt in 2013, with the slowdown in output from Australia and Europe being offset by strong growth across South America and Asia. We expect modest growth from the major producers, with Mexico retaining its pole position.”

2) $30-$32 Neil Meader (Head of Precious Metals Research and Forecast) according to Forbes

“For the moment, we would expect to see a continuation of the price volatility that we’ve seen of late.

“The unknown for the longer term is inflation.”

“It would be wrong to assume that a year-on-year price fall automatically presages an end to the multi-year rally; that occurred in 2009 and yet prices (based on the annual average) then more than doubled in just two years.”

3) $31 Deutsche Bank

The bank lowered its forecast last month 16.5% to $31 according to Fox because the demand for stocks over commodities is rising and the growth in the United States of America is improving. The 2014 forecast was also significantly reduced.

Excluding major banks currently in the red. Deutsche Bank is the fifth least profitable major bank in the world with barely $400 million in profits. It appears they are no longer qualified to give financial advice to anybody. Perhaps they should hire me. I can easily turn a profit of $40 million. I am just a regular guy. They have 100,000 employees.

4) $33 HSBC

The bank increased its target for silver from $32 based on four factors driving prices higher: industrial demand, investor appetite, strong coin and bar purchases and a bottoming out of jewelry demand according to the Wall Street Journal.

“Greater industrial silver consumption is one of the most compelling arguments in favor of higher prices.”

5) $34.10 BNP Paribas

The bank reduced its silver 2013 forecast a few months ago to $34.10 from $39.05 according to Reuters.

6) $35 Morgan Stanley

Morgan Stanley is very bullish on silver and selected the precious metal as one of the Top Picks for 2013 according to BusinessWeek.

“Gold, silver and corn will outperform other raw materials next year as a weaker dollar and rising investor demand bolster precious metals while supply curbs aid grains.”

7) $38 Commerzbank according to the Wall Street Journal

Silver is “establishing itself as a precious metal with an industrial character, setting itself significantly apart from gold.”

8) $40.25 Michel O’Brien

Silver To Gain 29% in 2013 – Analysts, Traders and Investors.

“The silver market remains a very small market and this continuing global investment and store of value demand should lead to silver reaching a real record high, inflation adjusted, of over $140/oz in the coming years.”

9) $50-$60 Ge Christenson according to SilverSeek

“This is not a prediction based on wishful thinking and hope, but a best estimate based on rational analysis of data stretching back to 1975.”

“Silver (and gold) will continue to rise, doubling every 3 – 4 years, until our government manages to tame the deficits, the borrowing, and the inevitable inflation.”

10) $91 Equity Management Academy

Silver Doctors started recently in 2011 and they are visited by over 750,000 each month. The video analysis by Steve Roy is only 9 minutes long.

This was the highest forecast I could find at the time of this writing – a time when, admittedly, silver prices are extremely low. It’ll be interesting to see which of the predictions above come the closest to the truth by the end of the year.

The real reason 2013 Silver Eagles hit an all-time high in January

The U.S. Mint probably isn’t the best gauge of market demand for silver. It’s too easily overwhelmed by demand, and that pushes sales forward into months when demand could otherwise have been low.

Because the silver investment market is so small, it’s particularly vulnerable to hype. That’s exactly what the commodities research firm CPM Group thinks is happening now as investors trumpet the “incredible” demand for silver coins in January. While the U.S. Mint did announce all-time sales records for 2013 silver eagles in January (with 7,498,000 coins sold), CPM Group argues that’s just a hold-over of pent-up demand from earlier in the winter.

“All of this talk about a shortage of silver is irrational and not supported by readily available market data,” CPM Group says in its latest report.

Specifically, the company cites worries over the Fiscal Cliff in November and December as driving up demand for American Eagles. Since the Mint sold-out of coins in both November and December, that demand rolled forward into January driving sales up to record levels.

CPM Group’s been painting a pretty bleak picture of silver prices going forward. The commodities research firm believes prices will head lower over the next decade (through 2022) rather than higher as most silver price prognosticators would have you believe.

I’m not ready to make that assumption, but there are lessons to be learned from CPM Group. Mainly that the U.S. Mint isn’t the best gauge of market demand for silver. It’s too easily overwhelmed by demand, and that pushes sales forward into months when demand could have otherwise been low.

Silver will surge 400% through 2016, Williams says

A British fund manager looks for silver prices to peak in the third quarter of 2015.

Ok. I’ll admit I’m not entirely sure who Ian Williams is. This UK article describes him simply as “a City-based asset fund manager.” Still, he’s rather brazen in his predictions for the white metal.

Silver is destined to enter a “sustained bull market” in the coming weeks. Mr Williams believes the price of silver will increase fivefold between now and 2016, with a peak expected in the third quarter of 2015.

Good news for silver bulls if Mr. Williams can be trusted. More at livecharts.co.uk.

Four reasons to be bullish on silver in 2013

Global Resource Specialist Peter Krauth of Money Morning believes silver prices could hit $54 an ounce in 2013. Here’s why.

Global Resource Specialist Peter Krauth of Money Morning believes silver prices could hit $54 an ounce in 2013. Here are four reasons why he’s so bullish on the metal:

  1. An expected normalization in the gold-silver ratio
  2. President Obama’s prediliction for money-printing
  3. Hard asset investor demand as paper currencies continue to slide
  4. Growing industrial demand

More at ETFDailyNews.

Gold and silver bubble will ‘dwarf’ the Internet bubble

It’s probably the best risk-reward situation right now as the gold and silver markets have ever seen in terms of the equities.

One of my favorite quotes in recent news came from Bill Murphy founder and chairman of the Gold Anti-Trust Action Committee (GATA). In an interview (that I highly recommend) with Jim Puplava of the Financial Sense Newshour, Murphy argued that the price of gold and silver have been successfully manipulated for decades.

The debt crisis that’s plaguing the U.S., Europe, Japan and other countries will eventually lead to so much money-printing, though, that continuing to suppress the price of precious metals just won’t be possible. That’s when we’ll truly see a tremendous climb in prices.

“When the public comes in here in our tiny gold and silver markets, it will be a bubble, and it will dwarf what the Internet did except it will be real for a long period of time,” Murphy said. “And that’s coming.”

That’s good news for gold and silver stock holders, but it will likely be bad for everyone on the outside looking in. Since Murphy’s certain we’re nearing the tipping point for inflation (especially after the Fed signaled that QEIII is coming on Friday), he looks at buying mining shares as a no-brainer.

“It’s probably the best risk-reward situation right now as the gold and silver markets have ever seen in terms of the equities,” he says.

Related

Silver outperforms all other precious metals in August; Where do metals prices go now?

Silver rallied more than 4.5 percent to give it as a solid lead as the top-performing metal in August. It could be a leading indicator that now’s the time to move into gold and silver mining stocks.

When Federal Reserve Chairman Ben Bernanke said the Fed “will provide additional policy accommodation” to bolster the US economy on Friday, metals prices sprinted higher in an end-of-the-month surge. Silver rallied more than 4.5 percent to give it as a solid lead as the top-performing metal in August.

Precious Metals Gains, August 2012

Metal Monthly Gain
Gold +4.5%
Silver +12.6%
Platinum +8.5%
Palladium +6.6%

The moves propelled gold to a five-month high while silver’s sitting at a four-month high. Still, leading analysts seem to think the best is yet to come for metals as quantitative easing looks to be more imperative.

“We took the amount of debt owned by major countries that is going to have to roll over in the next three years,” Jim Puplava of the Financial Sense Newshour said recently. “Over 50 percent of US debt is rolling over, 50 percent of Japanese debt, German debt, (etc.), and none of these countries – whether it’s the United States or Europe or Japan – can afford a spike in interest rates. So you know sooner later we’re going to get multiple forms of quantitative easing.”

More quantitative easing means higher inflation and higher precious metals prices as the value of global currencies retreat. That really has me taking a closer look at gold and silver stocks. Many of them have been trending up over the past three months, but they’re still trading below where they were a year ago.

Let’s take a look at a small-cap silver mining stock like Great Panther Silver Ltd. (AMEX:GPL). One year ago, shares stood at $3.19. As of Friday’s close, they were trading at $1.97. If prices return to last year’s levels, that would be a gain of nearly 62 percent.

“When the public comes in here in our tiny gold and silver markets, it will be a bubble, and it will dwarf what the Internet did except it will be real for a long period of time,” Bill Murphy founder and chairman of the Gold Anti-Trust Action Committee (GATA) Jim Puplava in that same interview. “And that’s coming. … It’s probably the best risk-reward situation right now as the gold and silver markets have ever seen in terms of the equities.”

Related

Silver prices set to surge higher

Bernanke didn’t say the Fed “may” stimulate, he said the Fed “will” stimulate. That was all it took. Gold and silver prices were off to the races.

Silver prices rocketed higher on Friday thanks to hints from Federal Reserve Chairman Ben Bernanke that QE3 could be around the corner. Prices for the white metal traded in a narrow range around $30.70 an ounce Wednesday and Thursday in the run-up to Bernanke’s speech.

Early Friday, prices started climbing and they didn’t stop until the markets closed. By the end of the day, silver was up to $31.74 an ounce – a gain of 4.58% in a single day of trading. The actual quote that had traders salivating is (in typical Bernanke fashion) vague:

“Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” he said (per IBD).

Bernanke didn’t say the Fed “may” stimulate, he said the Fed “will” stimulate. That was all it took. Shares in gold and silver mining stocks were off to the races. Majors like Silver Wheaton (NYSE:SLW) rose 5.2 percent and Silver Standard (NASDAQ:SSRI) climbed 7.9 percent. Some small-cap miners did even better with Great Panther Silver (NYSEAMEX:GPL) rocketing up more than 11 percent.

“My friend Eric Sprott of Sprott Asset Management is one of the smartest men I’ve ever met in my life and a real detail guy – and he thinks silver is going to go well above $100, and you might even be able to pick a number for silver,” Bill Murphy founder and chairman of the Gold Anti-Trust Action Committee (GATA) said in a recent interview with Financial Sense. “I think … people that are willing to do their homework and be patient and accumulate these cheap gold and silver shares will make fortunes in the years ahead.”

Of course, anytime there’s a run-up in gold and silver prices, it doesn’t happen smoothly. Since precious metals act as a barometer of the wider economy, political changes and economic numbers can cause large price swings. When prices are on the rise, though, it can happen violently. And it looks like we could be in the midst of another big upswing.

Related

Adventure Gold Inc. (PINK:AGONF, CVE:AGE) stock forecast

Adventure Gold Inc. holds rights to more than two dozen potential gold properties in the Abitibi Greenstone Belt located in north-western Quebec and north-eastern Ontario.

This post is part of series where we’re checking in on the Top 500 junior gold and silver mining stocks profiled in our book Top 500 Gold and Silver Mining Stocks: Metalproofing Your Portfolio from the Coming Inflation Shock.

Performance: First, let’s compare Adventure Gold’s performance against the AMEX Gold Bugs Index (HUI) – a basket of industry-leading gold stocks.

Time Span AGONF Performance HUI Performance
1 Month +61% +13%
3 Month +44% +3%
YTD -15% -12%

Adventure Gold’s following the usual trend: it’s more volatile than larger equities. When times are good, they’re really good for small cap miners. When times are bad, the declines are steeper. Still, AGONF’s performance over the past three months has been particularly impressive.

Profile: Adventure Gold Inc. holds rights to more than two dozen potential gold properties in the Abitibi Greenstone Belt located in north-western Quebec and north-eastern Ontario. The company plans to spend $14 million on exploration over the next five years. Most recently, Phase 2 drilling has begun on the Lapaska Property in Quebec. Highlights from previous drilling there showed 1.0 g/t gold over 103.4m including 10.3 g/t gold over 3.8m. http://www.adventure-gold.com/

Risks: Volume on AGONF is extremely low. Some days no shares trade hands. That means that even if you want to sell your shares, there might not be a buyer out there. If there is a buyer, they probably want a discount to the current quote. Volume currently averages 2,500 shares per day.

Recent News: Phase III drilling has kicked off on the company’s 100%-owned Pascalis-Colombiere gold property in the Val-d’Or mining camp in Quebec. The most promising hole showed 3.1 g/t Au over 27.0 metres. Click for more drilling results. Pascalis-Colombiere is a proven property. It yielded just over 200,000 ounces of gold for Cambior Inc. (now IAMGOLD) between 1989 and 1993. That’s a plus over more speculative explorers with unproven plots of land.

Adventure Gold had $5 million on hand as of April, and they have partnerships with two major mining companies in Agnico Eagle (Dubuisson in Val d’Or) and Lake Shore Gold and RT Minerals (Meunier-144 in Timmins West). They’re planning $2 million in drilling through next April with additional work commitments of $10 million over the next 5 years. Promising results would be a boon to the company’s shares.

Check out our book Top 500 Gold and Silver Mining Stocks: Metalproofing Your Portfolio from the Coming Inflation Shock (pictured above) to uncover more undiscovered gold and silver mining stocks.