The initial bullish target for silver is nearly reached. For the past two years, I've predicted that silver would reach $34.70 in 2023 or 2024.
Silver is an excellent PM to have in a portfolio, especially given the volatility of the current economic climate.
In this article, I present 4 insights for silver investors with a medium to long-term perspective.
1. Silver Is Extremely Undervalued
Silver is ridiculously undervalued by all standards.
There are 7 different ratios representing major asset classes. You can compare the price of silver to these asset classes to assess valuation. All these ratio charts consistently show bullish reversals.
One example is the silver-to-commodities ratio. The chart below speaks for itself
2. The Silver Price Will Hit $50/oz
Silver will eventually reach $50/oz. The weekly chart clearly shows a significant cup and handle reversal pattern. The first target for this pattern is the 2011 highs, but this is just the beginning.
This pattern has much higher targets, although it may take one or two more years to reach them. So, the chart makes it clear—it's not a question of IF but WHEN silver will hit $50/oz.
Note that this cup and handle formation is one of the most powerful patterns among the hundreds of markets we track, highlighting its upside potential.
3. AUD Is Confirming Silver's Bull Market
Silver's bull market was confirmed in the currency market.
It's important to consider intermarket dynamics. A strong bull market in any asset or stock is usually confirmed by another market.
For silver, we saw confirmation in the Australian Dollar (AUD), the most commodity-sensitive currency. When the Aussie rises, it signals a favorable environment for commodities.
The current silver to AUD ratio chart shows a clear and powerful bullish reversal, confirming silver's bull market trend.
4. Well-established Silver Shortage
The current silver shortage is becoming a significant issue in the market. There is a clear supply squeeze, with demand for silver outpacing available stocks. This shortage is partly due to increased industrial use, particularly in electronics and renewable energy sectors, and partly due to strong investment demand.
The Silver Institute has confirmed that this is the first documented physical silver market shortage in history. This supply imbalance supports higher prices, as demand continues to rise while supply struggles to keep up.
Investors should pay close attention to this trend, as it could drive silver prices even higher in the coming years. In simple terms, the scarcity of silver is making it more valuable, which could benefit those who invest in it now. The current shortage highlights the importance of monitoring supply and demand dynamics in the silver market.
Takeaway
Silver is an excellent portfolio addition. Like gold, it's an excellent PM to hold due to an increased level of RWA tokenization. This means that there are fintech companies that are creating tokenized versions of gold/silver for easy spending (the gold and silver is still kept in audited and secure vaults).
There is a clear market demand for silver and multiple technical indicators are pointing towards a bull market. The silver price is on the way to $48 in the near future. And it could even hit $100 by 2025/2026. Charts do not lie and are very accurate, when you know how to interpret them in conjunction with other criteria.