By Molly Gavin
Predicting here the price of silver is likely to go can be hard because this precious metal is one of the most versatile investment assets. For instance, between June of 2020 and June of 2021, silver has reached levels of $17 to $29.50 an ounce. It can be confusing for a lot of investors who aren’t used to this erratic and unpredictable behavior of this precious metal. It can be tricky to answer questions like: “When is the best time to sell silver”. Different analysts have different views of where the price of silver is going. A lot of first time investors are often advised to take a long-term approach – to hold off on selling silver the conditions for a rise in the price of silver arise.
Silver year-on-year
There is no silver investment analyst that can claim they know with certainty what the silver price will be in a week, a month or even a day. The best way to deduce where the silver price is going is to look at the past. In 2020 you could sell silver for around $28 but then it dropped to $22 by September. Earlier in 2021, the silver price reached highs of $29.50 an ounce only to drop to $24 a month later.
It helps to look at the price of gold and what drives the price movement in order to estimate where silver might be headed. For example, the jump from $17 to $28 in 2020
In fact, silver’s big ride from US$17 to over US$28 in 2020 corresponded with the gold price reaching $2,067.15 an ounce in August of 2020. The key driver for the rising gold price and silver has mostly been uncertainty and not so much as supply and demand. 2020 was a dramatic year that was filled with a lot of geopolitical events. These haven’t really vanished which means that the market is still uncertain. The price of silver is still set to rise.
Follow the US Federal Reserve plans
For most precious metal investors, the decisions that the US Federal Reserve take with regards to interest rate plans are important. When the Fed increases its interest rates, this has a negative impact on precious metals like silver and gold. This is because higher interest rates yield more profit for investment products that gain interest. The last time the Fed cut interest rates was in 2008 but in July 2019 they reduced the rates by a quarter of a point or 2 from 2.25. The Fed went on to slash the rate of interest to zero.
Silver investors also have to watch what other economists and central banks are doing. Are they buying more silver or selling?
Everyone is watching the progress of the geopolitical risks created by general social unrest, trade wars that China has launched against a couple of countries and other socioeconomic problems, precious metals like gold and silver have to be watched carefully. However, almost everyone agrees that silver is headed for a stellar performance.
