The silver price had long been the domain of precious metals investors and day traders. However, it recently surged to an all-time high of US$91 per ounce in late 2021 and speculation has been rampant regarding further increases. Could the silver price really hit US$100 per ounce?
There’s no easy answer to that question as so much depends on the forces of supply and demand that drive silver prices. Silver inventories have been steadily dropping over the past few years, and demand for silver has increased. The reasons for the demand include various industrial uses, such as electronics manufacturing and jewelry production, as well as growing investments in silver from both retail investors and larger funds.
The economic impacts of the global pandemic have also had a hand in the surge in silver prices. Historically, more investors moved their money into precious metals during times of economic uncertainty, as a way to protect their wealth. This trend also contributed to the rise in the silver price.
On the other hand, there are several factors that could suppress the silver price. Despite the bullish case for silver, there are risks as well. For example, tariffs imposed by the United States on imported goods from other countries could reduce the amount of silver entering the domestic market and cause prices to fall.
In addition, silver’s prices depend heavily on industrial demand, which means any declines in industrial production or drops in economic growth could act as an additional headwind to silver prices. Moreover, if investors become jittery and quickly exit their positions in silver, its price could suffer accordingly.
Ultimately, despite the bullish factors that could push silver prices higher, they could be countered by equally strong headwinds that could bring them down. For the silver price to hit US$100 per ounce, there must be enough buyers willing to pay that price on a large enough scale to push it up.
Given the uncertain economic environment and the risk of macroeconomic problems, silver prices will fluctuate in the near future. However, its long-term outlook is promising, so investors with a long-term time horizon may wish to hold silver as a hedge against any further developments in the economy.
The silver price had long been the domain of precious metals investors and day traders. However, it recently surged to an all-time high of US$91 per ounce in late 2021 and speculation has been rampant regarding further increases. Could the silver price really hit US$100 per ounce?
There’s no easy answer to that question as so much depends on the forces of supply and demand that drive silver prices. Silver inventories have been steadily dropping over the past few years, and demand for silver has increased. The reasons for the demand include various industrial uses, such as electronics manufacturing and jewelry production, as well as growing investments in silver from both retail investors and larger funds.
The economic impacts of the global pandemic have also had a hand in the surge in silver prices. Historically, more investors moved their money into precious metals during times of economic uncertainty, as a way to protect their wealth. This trend also contributed to the rise in the silver price.
On the other hand, there are several factors that could suppress the silver price. Despite the bullish case for silver, there are risks as well. For example, tariffs imposed by the United States on imported goods from other countries could reduce the amount of silver entering the domestic market and cause prices to fall.
In addition, silver’s prices depend heavily on industrial demand, which means any declines in industrial production or drops in economic growth could act as an additional headwind to silver prices. Moreover, if investors become jittery and quickly exit their positions in silver, its price could suffer accordingly.
Ultimately, despite the bullish factors that could push silver prices higher, they could be countered by equally strong headwinds that could bring them down. For the silver price to hit US$100 per ounce, there must be enough buyers willing to pay that price on a large enough scale to push it up.
Given the uncertain economic environment and the risk of macroeconomic problems, silver prices will fluctuate in the near future. However, its long-term outlook is promising, so investors with a long-term time horizon may wish to hold silver as a hedge against any further developments in the economy.
