silver coin with forecast chart

‘Silver will upsell gold’ in 2018, asserts the lead analyst for the research team at Thomson Reuters GFMS, Johann Wiebe. His argument is based on the idea that when the gold-silver ratio surpasses 80 it usually reverses back because its ‘simply too expensive vs. gold.’[1] Wiebe is not the only expert predicting higher silver prices this year.

What are the silver price predictions for 2018? What trends should investors be watching? And what factors will lead to the expected increase in prices for the white metal?

Silver Price Predictions for 2018

While the price of silver dipped at the end of 2017, banks are optimistic about prices bouncing back and holding stronger by the end of 2018.

  • Bank of Montreal is expecting a comeback in silver prices of up to $19 an ounce, with a yearly average of around $17.78. They are also estimating a future rise to $20 an ounce.
  • Goldman Sachs sees prices going up to $17.20 per ounce by the end of the year.
  • Commerzbank analysts predict silver prices to increase to $17.25 per ounce, with the greatest gains coming in the fourth quarter.[2]
  • JP Morgan forecasts silver prices to climb to $18.70 an ounce.
  • RBC Capital Markets is betting on $19.40 per ounce.[3]

Silver Price Factors

It’s important to assess the factors that are expected to drive silver prices up, so you can spot the appropriate trends and invest accordingly.

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Early Signs of Inflation

Lower unemployment rates, rising wages, and an increase in the Fed interest rates are all being viewed as harbingers of inflation. When inflation occurs, prices creep up and the dollar loses its value. Precious metals, however, maintain their value. As more investors turn to silver to protect their wealth against the ravages of inflation, prices should increase.

Raging Economic, Financial, and Political Problems

With instability and uncertainty in world politics, finance, and the global economy, many investors may have a renewed interest in precious metals, increasing demand for gold and silver. Some of the factors prompting investors to turn to safe haven assets are the looming trade war with China, an inflated stock market, the political volatility between the United States and Russia, and unrest in the Middle East.

Silver Supply and Demand

Decreasing supplies of silver plus increasing demand is a recipe for higher silver prices.

Silver Shortage

Declines in mine supply have been recorded since 2016 and are predicted to continue into the next decade. Unlike gold, silver inventories tend to get depleted quickly. These factors could weigh heavily on the silver supply and demand equation.

Silver Demand

When most people think of silver, jewelry and coins often come to mind. The truth is silver is used heavily in industry. In fact, industrial applications have accounted for more than 50 percent of the yearly demand of silver globally over the last five years. Industrial fabrication, electrical components, the automotive sector, and solar all contributed to rising silver demand in 2017.

Jewelry and silverware were also sources of increased demand for silver, accounting for 2 percent and 12 percent, respectively.[4]

Read more about the 10 Factors That Influence Silver Prices.

Silver Investing Forecast for 2018

With current political and economic tensions affecting the global market, many market participants are returning to safe haven investments. This factor, along with trends in silver’s supply and demand, supports a favorable outlook for the price of silver in the upcoming year. Buying now before prices rise is a wise investment move.