Could the Silver Price Really Hit $100 per Ounce? | Commodities

Will First Majestic Silver CEO’s silver price prediction of more than US$100 per ounce come true?

The silver spot price made waves in 2020 when it rose above US$20 per ounce for the primary time in 4 years, and the valuable metallic has repeatedly examined US$30 per ounce since.

Since September of 2024, silver has held above US$30, and on October 22 the silver price reached a 12-year high when it got here close to breaking by means of the US$35 mark. Whereas it fell back by November, the US$30 degree has served as a ground.

Effectively-known determine Keith Neumeyer, CEO of First Majestic Silver (TSX:FR,NYSE:AG), has steadily mentioned he believes the white metallic may climb even additional, to hit the US$100 mark and even attain as high as US$130 per ounce.

Neumeyer has voiced this opinion usually lately. He put up a US$130 price goal in a November 2017
interview with Palisade Radio, and he additionally mentioned it in an August 2022 interview with Wall Avenue Silver. He has reiterated his triple-digit silver price forecast in a number of interviews with Kitco through the years, as lately as March 2023.

In 2024, Neumeyer has made his US$100 call in a dialog with
ITM Buying and selling’s Daniela Cambone on the Prospectors & Builders Affiliation of Canada (PDAC) conference; and in April he acknowledged his repute because the “triple-digit silver guy” on the Todd Ault Podcast.

He believes silver may hit US$100 on account of a selection of components, together with its constant deficit, its industrial demand and how undervalued it’s in comparison with gold.

At instances he’s been even bolder, suggesting in 2016 that silver may attain US$1,000 if gold have been to hit US$10,000. Extra lately, his anticipated timeline for US$100 silver has been pushed back, however he stays very bullish on the metallic within the long time period.

With a view to higher perceive the place Neumeyer’s opinion comes from and whether or not a triple-digit silver price is de facto within the playing cards, it’s important to take a take a look at the components that have an effect on the metallic’s actions, in addition to the place costs have been previously and the place different industry insiders assume silver may very well be headed. First, let’s dive a little deeper into Neumeyer’s US$100 prediction.

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Why is Neumeyer calling for a US$100 silver price?

There’s a vital distance for silver to go earlier than it reaches the success Neumeyer has boldly predicted. Actually, to ensure that the valuable metallic to leap to the US$100 mark, its price must increase from its present worth by round 350 p.c.

Neumeyer has beforehand acknowledged that he expects a triple-digit silver price partially as a result of he believed the market cycle may very well be in comparison with the 12 months 2000, when buyers have been crusing high on the dot-com bubble and the mining sector was down. He thinks it’s solely a matter of time earlier than the market corrects, prefer it did in 2001 and 2002, and commodities see a massive rebound in pricing. It was during 2000 that Neumeyer himself invested closely in mining shares and got here out on high.

“I’ve been calling for triple-digit silver for a few years now, and I’m more enthused now,” Neumeyer mentioned at an occasion in January 2020, noting that there are a number of components behind his reasoning. “But I’m cautiously enthused because, you know, I thought it would have happened sooner than it currently is happening.”

In his August 2022 with Wall Avenue Silver, he reiterated his help for triple-digit silver and mentioned he is luckily not alone on this optimistic view — in reality, he is been surpassed in that optimism. “I actually saw someone the other day call for US$500 silver,” he mentioned. “I’m not quite sure I’m at the level. Give me US$50 first and we’ll see what happens after that.”

One other issue driving Neumeyer’s place is his perception that thesilver marketis in a deficit. In a Could 2021 interview, when offered with supply-side information from the Silver Institute indicating the largest surplus insilver markethistory, Neumeyer was blunt in his skepticism. “I think these numbers are made up,” he mentioned. “I wouldn’t trust them at all.”

He identified that subtracting internet investments in silver exchange-traded merchandise leaves the market in a deficit, and in addition questioned the methodology behind the institute’s recycling information given that almost all recycled silver metallic comes from privately owned smelters and refineries that sometimes don’t make these figures public.

“I’m guessing the mining sector produced something in the order of 800, maybe 825 million ounces in 2022,” Neumeyer mentioned when giving a This autumn 2022 overview for his company. “Consumption numbers look like they’re somewhere between 1.2 and 1.4 billion ounces. That’s due to all the great technologies, all the newfangled gadgets that we’re consuming. Electric vehicles, solar panels, windmills, you name it. All these technologies require silver … that’s a pretty big (supply) deficit.”

In a December 2023 interview with Kitco, Neumeyer burdened that silver is more than simply a poor man’s gold and he spoke to silver’s important position in electric automobiles and photo voltaic cells.

Consistent with its view on silver, First Majestic is a member of a consortium of silver producers that in January 2024 despatched a letter to the Canadian authorities urging that silver be acknowledged as a essential mineral. Silver’s inclusion on the checklist would permit silver producers to speed up the development of strategic tasks with financial and administrative help from the Canadian authorities. Canada’s essential minerals checklist is anticipated to get an replace in the summertime of 2024.

In his 2024 PDAC interview, Neumeyer as soon as again highlighted this sizable imbalance within the silver’s supply-demand image. “We’re six years into this deficit. The deficit in 2024 looks like it’s gonna be bigger than 2023, and why is that? Because miners aren’t producing enough silver for the needs of the human race,” he mentioned.

Extra controversially, Neumeyer is of the opinion that the white metallic will ultimately turn into uncoupled from its sister metallic gold, and must be seen as a strategic metallic on account of its necessity in lots of on a regular basis home equipment, from computer systems to electronics, in addition to the applied sciences talked about above. He has additionally acknowledged that silver manufacturing has gone down lately, which means that opposite to fashionable perception, he believes the metallic is definitely a uncommon commodity.

Neumeyer’s March 2023 triple-digit silver call is a long-term call, and he defined that whereas he believes gold will break US$3,000 this 12 months, he thinks silver will solely attain US$30 in 2023. Nevertheless, as soon as the gold/silver ratio is that unbalanced, he believes that silver will start to take off, and it’ll simply need a catalyst.

“It could be Elon Musk taking a position in the silver space,” Neumeyer mentioned. “There’s going to be a catalyst at some time, and headlines in the Wall Street Journal might talk about the silver supply deficit … I don’t know what the catalyst will be, but investors and institutions will wake up to the fundamentals of the metal, and that’s when it will start to move.”

In an August 2023 interview with SilverNews, Neumeyer mentioned his perception that banks are holding thesilver marketdown. He pointed to the paper market for the metallic, which he mentioned the banks have capped at US$30 even in instances of high shopping for.

“If you want to go and buy 100 billion ounces of silver (in the paper market), you might not even move the price because some bank just writes you a contract that says (you own that),” he defined, saying banks are keen to get short, as a result of as soon as the shopping for stops, they push the price down to get the buyers out of the market and buy the silver back. “… If the miners started pulling their metal out of the current system, then all of a sudden the banks wouldn’t know if they’re going to get the metal or not, so they wouldn’t be taking the same risks they’re taking today in the paper markets.”

The month after the interview, his company First Majestic launched its own one hundred pc owned and operated minting facility, named First Mint.

In 2024, gold skilled a resurgence in investor consideration because the potential for Fed price cuts got here into view. In his interview with Cambone at PDAC 2024, Neumeyer countered that notion, stating, “There’s a rush into gold because of the de-dollarization of the world. It has nothing to do with the interest rates.”

What components have an effect on the silver price?

With a view to glean a higher understanding of the valuable metallic’s probabilities of trading across the US$100 vary, it’s important to look at the weather that would push it to that degree or pull it additional away.

The power of the US greenback and US Federal Reserve rate of interest adjustments are components that may proceed to have an effect on the valuable metallic, as are geopolitical points and provide and demand dynamics. Though Neumeyer believes that the ties that bind silver to gold need to be damaged, the truth is that almost all of the identical components that form the price of gold additionally transfer silver.

For that motive, it’s useful to take a look at gold price drivers when attempting to know silver’s price motion. Silver is, of course, the more unstable of the 2 valuable metals, however nonetheless it usually trades in relative tandem with gold.

Trying first on the Fed and rates of interest, it is helpful to know that greater charges are typically destructive for gold and silver, whereas decrease charges are usually optimistic. That is as a result of when charges are greater curiosity shifts to merchandise that may accrue curiosity.

When the COVID-19 pandemic hit, the Fed cut charges down to zero from 1 to 1.25 p.c. Nevertheless, rising inflation led the Fed and different central banks to hike charges, which negatively impacted gold and silver. In February 2023, the Fed raised charges by simply 25 foundation factors, the smallest hike since March 2022, as Chair Jerome Powell mentioned the method of disinflation has begun. The Fed continued these small price hikes over the following 12 months with the final in July 2023.

On this latest upward cycle of thesilver market Fed rate of interest strikes have performed an outsized position in pumping up silver costs. In early July, as analysts factored within the rising potential for rate of interest cuts within the the rest of 2024, silver costs have been as soon as again testing Could’s practically 12-year high, and so they topped US$31 in September within the days main up to the anticipated first price cut.

Whereas central bank actions are important for gold, and by extension silver, one other key price driver recently has been geopolitical uncertainty. The previous few years have been stuffed with main geopolitical occasions comparable to tensions between the US and different international locations comparable to North Korea, China and Iran. Extra lately, the large financial influence of the COVID-19 pandemic, Russia’s conflict with Ukraine, the banking disaster in early 2023 and rising tensions within the Center East caused by the Israel-Hamas conflict have been sources of concern for buyers.

On a separate observe, there’s additionally a sturdy case to made for the metallic’s industrial potential. Greater industrial demand from rising sectors on account of components just like the transition to renewable vitality and the emergence of AI technology might be extremely supportive for the metallic over the following few years. Photo voltaic panels are an particularly thrilling sector as producers have discovered rising the silver content material will increase vitality effectivity.

Talking with the Investing Information Community (INN) in late June of 2024, Chen Lin of Lin Asset Administration mentioned that photo voltaic panels characterize a “killer app” for silver — a technological utility that may result in a sturdy surge in demand. Lin pointed a new report from Bernreuter Analysis that sees world photovoltaic installations rising from 444 gigawatts in 2023 to a vary of 600 to 660 gigawatts of newly put in photo voltaic capability in 2024.

May silver hit US$100 per ounce?

Whereas we will not know if we’ll attain a $100 per ounce silver price within the close to future, there’s help for Neumeyer’s perception that the metallic is undervalued and that “ideal conditions are present for silver prices to rise.”

Many are on board with Neumeyer in the concept silver’s prospects are shiny, together with Peter Krauth of Silver Inventory Investor, who believes that “we are very likely going to experience the greatest silver bull market of our generation.”

So, if the silver price does rise additional, how high will it go?

Let’s take a look at silver’s latest historical past. The best price for silver was just below US$50 within the Nineteen Seventies, and it got here close to that degree again in 2011. The commodity’s price uptick got here on the back of very sturdy silver investment demand. Whereas it has but to achieve these ranges again, the silver price has elevated considerably lately.

After spending the latter half of the 2010s within the teenagers, the 2020s have seen silver largely maintain above US$20. In August 2020, the price of silver reached practically US$28.50 earlier than pulling back again, and moved back up close to these heights in February 2021. The price of silver noticed a 2022 high level of US$26.46 in February, and handed US$26 again in each Could and November 2023.

Silver rallied within the later half of the primary quarter of 2024, and by April 12 was as soon as again flirting with the US$30 mark because it reached an 11 12 months high of US$29.26. Regardless of a temporary pull back to the US$26 degree, the month of Could noticed the silver price take one other run at US$30, this time efficiently pushing into US$32 territory on Could 19. Silver costs skilled volatility for a lot of the third quarter, starting from a high of US$31.39 on July 11 to a low of US$26.64 on August 7.

The price of silver had a good run in late October of 2024 within the lead up to the election, rising up to US$34.80 on October 22. Nevertheless, a stronger greenback and indicators that the Federal reserve will not be so fast to cut rates of interest as deeply as beforehand anticipated have been seen as price destructive for silver. The valuable metallic’s price was in a downward slide for a lot of November.

Fed Chair Jerome Powell has “indicated that the central bank is in no rush to lower rates, citing a strong economy, a solid labor market, and persistent inflation,” in line with Buying and selling Economics. “Silver also faced additional pressure from Donald Trump’s election victory, as markets anticipated inflationary policies and a more aggressive stance toward China, which could dampen demand for the metal.”

For a lot of the primary two months of 2025, silver adopted gold greater on components together with persistent inflationary pressures introduced on by Trump’s aggressive tariff bulletins and the continued geopolitical dangers within the Center East.

As of February 20, 2025, the price of silver was across the US$33 mark, up more than 13 p.c because the starting of the 12 months.

What do different consultants take into consideration US$100 silver?

Many consultants within the space count on silver to carry out strongly within the years to return, however do not essentially see it reaching US$100 or more, particularly given the present macroeconomic circumstances.

As talked about, some consultants, together with Krauth, agree with the triple digit silver speculation. In a Could 2022 interview with INN, he defined that there are a number of paths silver may take to get to the triple digits.

“As I was doing my research, and this goes back over several years already, I would get to that US$300 forecast for an ultimate high in the silver price in different ways,” he mentioned, and broke down what a low gold/silver ratio — like we have seen the earlier instances that silver has peaked — may imply for the metallic’s price sooner or later.

Talking to INN in late December 2023, Krauth was trying ahead to a rally in silver for 2024.

“One of probably the most vital (occasions) for me was after we noticed virtually the whole US Treasury yield curve peak above 5 p.c in mid-October,” he said. “Since then, we have had the US Greenback Index peak at 107. Each of these have fallen significantly since, I consider within the market’s view that the Fed has stopped mountain climbing charges, with the expectation that price cuts will come someday in 2024.”

In his December interview with INN, Krauth predicted silver could move close to the US$30 mark in the second half of 2024, and it has now surpassed that. The following month, at the Vancouver Resource Investment Conference (VRIC), Krauth made his own triple-digit silver call when he suggested silver could climb to over US$300 by 2030.

Speaking with INN at PDAC in March 2024, Krauth said he sees a serious secondary silver supply shortfall emerging over the next 18 months to two years, which will cause the sector to “wake up in a massive means.”

For his half, Chen Lin of Lin Asset Administration advised INN in June 2024 that he thinks US$50 silver is a risk as soon as the market lastly begins to issue within the growing supply-demand hole. As Lin sees it silver miners have cut manufacturing lately as they struggled to stay profitable within the decrease silver price panorama. This decline in mine provide poses a drawback for rising industrial demand for silver.

Breaking by means of the historic US$50 ceiling will probably occur in fast, sharp day by day spikes within the fashionable AI trading setting, he mentioned, and it may probably be “the first step” towards even greater silver costs, together with $100 silver. “The key is that people really fully understand and appreciate the actual (supply) deficit of silver,” Lin famous.

In October 2024, Lynette Zang, CEO of Zang Enterprises, spoke with the Investing Information Community about her outlook for gold and silver costs. “We’ll see, but it wouldn’t surprise me to see the spot market break US$3,000 (per ounce) by the end of this year,” she mentioned about gold, including that silver may end 2024 on the US$50 per ounce degree. Zang sees the world’s central banks making ready for hyperinflation.

Analyst firm InvestingHaven could be very bullish onsilver marketand is anticipating costs to check all-time highs in 2025 and set new information within the subsequent few years, even reaching as high as US$77 in 2027 and US$82 by 2030.

FAQs for silver

Can silver hit $1,000 per ounce?

In 2016, Neumeyer predicted that silver may hit $1,000 per ounce if gold ever climbed to US$10,000 per ounce. That is associated to the gold to silver manufacturing ratio mentioned above, which on the time of the prediction was round 1 ounce of gold to 9 ounces of silver and final 12 months was about 1:8.3.

If silver was priced in line with manufacturing ratio right now, when gold is at US$2,000 silver can be round US$240, or US$222 at 1:9. Nevertheless, the gold to silver pricing ratio has really sat round 1:80 to 1:90 lately, and when gold moved above US$2,400 in Could 2024, silver was round US$32. Moreover, even when pricing did change drastically to replicate manufacturing charges, gold would need to climb by more than 300 p.c from its present price to hit the US$10,000 Neumeyer talked about back in 2016.

As issues at the moment are, it appears unlikely silver will attain these highs.

​Why is silver so low-cost?

The first motive that silver is bought at a vital low cost to gold is provide and demand, with more silver being mined yearly. Whereas silver does have each investment and industrial demand, the worldwide give attention to gold as an investment vehicle, together with international locations stockpiling gold, can overshadow silver. Moreover, jewellery alone is a large pressure for gold demand.

There’s an abundance of silver — in line with the US Geological Survey, up to now 1,740,000 metric tons (MT) of silver have been found, whereas solely 244,000 MT of gold have been discovered, a ratio of about 1 ounce of gold to 7.1 ounces of silver. In phrases of output, 25,000 MT of silver have been mined in 2024 in comparison with 3,300 MT for gold. Taking a look at these numbers, that places gold and silver manufacturing at about a 1:7.5 ratio final 12 months, whereas the price ratio on February 20, 2025, was round 1:89 — a enormous disparity.

​Is silver actually undervalued?

Many consultants consider that silver is undervalued at below US$30 in comparison with fellow currency metallic gold. As mentioned, their manufacturing and price ratios are presently extremely disparate.

Whereas investment demand is greater for gold, silver has seen rising time within the limelight lately, together with a 2021 silver squeeze that noticed new entrants to the market take part.

One other issue that lends more intrinsic worth to silver is that it is an industrial metallic in addition to a valuable metallic. It has functions in technology and batteries — each growing sectors that may drive demand greater.

Silver’s two sides has been on show lately: Silver demand hit report highs in 2022, in line with the Silver Institute, with bodily silver investment rising by 22 p.c and industrial by 5 p.c over 2021. For 2023, industrial demand was up 11 p.c over the earlier 12 months, in comparison with 28 p.c decline in bodily silver investment.

​Is silver higher than gold?

There are deserves for each metals, particularly as half of a well-balanced portfolio. As many analysts level out, silver has been identified to outperform its sister metallic gold during instances of financial prosperity and growth.

Then again, during financial uncertainty silver values are impacted by declines in fabrication demand.

Silver’s duality as a valuable and industrial metallic additionally gives price help. As a report from the CPM Group notes, “it can be seen that silver in fact almost always (but not always) out-performs gold during a gold bull market.”

At what price did Warren Buffet buy silver?

Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B) purchased up 37 p.c of world silver provide between 1997 and 2006. Silver ranged from US$4 to US$10 during that period.

Actually, between July 1997 and January 1998 alone, the company purchased about 129 million ounces of the metallic, a lot of which was for below US$5. Adjusted for inflation, the company’s purchases in that window value about US$8.50 to US$11.50.

​How you can invest in silver?

There are a selection of methods to get into the silver market. For instance, buyers could select to put their money into silver-focused shares by shopping for shares of firms centered on silver mining and exploration. As a by-product metallic, buyers may also gain publicity to silver by means of some gold firms.

There are additionally silver exchange-traded funds that give broad publicity to silver firms and the metallic itself, whereas more skilled merchants could also be enthusiastic about silver futures. And of course, for individuals who want a more tangible investment, buying bodily bullion in silver bar and silver coin type can be an option.

Personal investor Don Hansen shared his methods with INN for investing in valuable metals, in addition to a information for building a low-risk gold and silver portfolio.

That is an up to date model of an article initially printed by the Investing Information Community in 2016.

Don’t neglect to observe us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, maintain no direct investment curiosity in any company talked about on this article.

Editorial Disclosure: The Investing Information Community doesn’t guarantee the accuracy or thoroughness of the data reported within the interviews it conducts. The opinions expressed in these interviews don’t replicate the opinions of the Investing Information Community and don’t represent investment advice. All readers are inspired to carry out their own due diligence.

The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.