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, say, 10 years?
Unfortunately, nobody can precisely predict that. Our modern economy is so complex that current models make precise long-term predictions impossible.
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 10 years out.
Price Prediction for Bearish Market
One of the significant factors explaining the 2010–20 pricing slump for silver has been a bearish commodity market for the past decade. In bear markets, asset prices fall as large holders sell off losing assets. This repeated cycle causes a chain reaction, which can cause commodity prices to lose a substantial percentage 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 percent loss.
Price Prediction for Bullish Market
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 crisis of 2008–09. As the housing market started to collapse, investors parked their money in defensive commodities such as gold and silver, resulting in price jumps from $15 per ounce for silver to nearly $50 per ounce—a 300 percent-plus increase!
In both cases, silver bull markets manifested from prominent market actors buying future contracts for silver. These large runs also took place when traditional economic vehicles lost value, such as during the 2009 recession.
So, what will silver be worth in 10 years? Assuming these same returns and a bullish market, 10-year predictions for silver prices can be anywhere between $60 per ounce to over $600 per ounce.
Silver Prices During Hyperinflation
There is one other scenario that could drastically affect the price of silver. Hyperinflation from strained supply chains and the public deficit could cause the value of the U.S. dollar to fall drastically. In this case, silver could be an excellent store of value when traditional fiat currencies fail.How Can I Buy Silver?
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.Pros and Cons of Investing in Silver
Like all commodities, investing in silver carries some risks. Below are some pros and cons of investing in silver as a commodity.Inflation Hedge
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.Tangible Asset
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.Less Expensive Than Gold
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 many of the same beneficial investment properties, although you need more of it to match a similar value as gold.Diversification
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.Multiple Uses
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.10-Year Forecast for Silver Prices
So what will silver be worth in 10 years? It’s difficult to say for sure. Purchasing silver could be a great idea in at least two of the three scenarios mentioned above. Silver bull markets could see rapid increases in the price of silver, and in hyperinflationary environments, silver could become an essential 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. You can expect a price increase in the future whenever there is a price fall. Falling prices can be a good sign to get into the precious metal trades to ride the future price increase.
