Silver breaks 12-year high – Is the next big rally just around the corner? 

Silver has recently surged to its highest level in over a decade, reaching $33.71 per ounce as of October 19, 2024, marking its strongest performance in 12 years. 

Over the past five years, silver has delivered nearly 92% returns, significantly outpacing gold’s 80% rise. This growing interest highlights silver’s dual role as both an industrial metal and a hedge during times of uncertainty, signaling the potential for continued bullish momentum.

Analysts outlook on Silver

Amid this bullish backdrop, prominent analyst James Turk has set a bold price target for silver, predicting that it could reach $50 in the coming months. 

Turk’s analysis suggests that once silver surpasses this key threshold, it will mark the end of its base-building phase, accelerating its bull market and driving the gold-silver ratio below 30.

Similarly, an analysis by trader Bob Loukas indicates that silver has broken out of a long-term downtrend, marking the start of a potentially parabolic move. After breaking through the $30.06 resistance level, silver has surged, signaling a possible continuation of this bullish trend.

Loukas points to a historical price target of $50 as the next key milestone. This level, last reached over a decade ago, represents a significant psychological and technical barrier. 

Silver’s next big rally is just around the corner

If silver maintains its current trajectory, reaching $50 would not only mark the end of its prolonged base-building phase but could also trigger a much broader bull market for the metal. 

With momentum indicators still showing room for growth, Loukas’s projection suggests that silver’s rally may be just beginning.

Furthermore, U.S. economist Peter Schiff echoed his optimism in a recent post on X (formerly Twitter).

“Patience pays off. Silver just made a new fourteen-year high, trading above $33.25. The opportunity to buy below $30 is likely gone for good. But the opportunity to buy below $40 still exists. But not for long. Gold also hit a new record high today, above $2,720.”

– Peter Schiff

Silver’s bullish fundamentals

Silver has experienced a significant price rally following the recent Federal Reserve interest rate cut, with expectations of further long-term gains driven by a shift toward easier monetary policies. 

Lower interest rates increase the attractiveness of non-yielding assets like silver, while ongoing geopolitical tensions, such as the conflicts in the Middle East, are further boosting its safe-haven demand.

Furthermore, positive economic data from China, the world’s largest consumer of metals, has further fueled demand for silver. The European Central Bank’s third rate cut of the year, aimed at controlling inflation, has also positively impacted the market.

Silver’s industrial demand is another major contributor to its price increase, particularly in sectors such as solar panels, electric vehicles, and renewable energy technologies, which are expected to experience substantial growth in the coming years.

Supply constraints and broader market drivers

On the supply side, declining ore grades and rising production costs are contributing to a supply deficit, further pushing prices upward. Moreover, silver’s inverse relationship with the U.S. dollar and Treasury yields will make silver more attractive to investors.

These factors create a strong bullish outlook for silver in the long term, especially with key political events like the upcoming U.S. elections adding further uncertainty to the market.

Institutional support has further strengthened the case for silver. For instance, Morgan Stanley has identified silver, along with other metals, as a strong bullish investment. 

Additionally, U.S. politician Debbie Wasserman-Schultz, the Democratic representative of Florida’s 25th congressional district and former DNC chair, has disclosed investments in silver mining companies, signaling confidence in the metal’s future potential.

In summary, silver’s strong fundamentals, combined with ongoing geopolitical tensions and heightened market volatility, indicate sustained upward momentum. With institutional investors and political figures showing increased interest, silver appears well-positioned for further gains in the months ahead.