Particularly, the cup and handle formation on the 50-year silver chart is immensely bullish. While $50 is an obvious target of this pattern, silver may resolve much higher.
Silver is the one asset that has the most powerful (bullish) long term chart structure. This bullish reversal pattern which is visible on the 50-year silver chart has a very obvious target: all-time highs (ATH).
Silver’s secular bullish reversal is exceptional and unique. It is visible, first and foremost, on the silver price chart of 50 years.
Admittedly, there is no other chart that has a long term reversal that looks as powerful as the one of silver price chart of 50 years. In fact, what stands out, is the exceptional duration of this formation. While we often see bullish reversals, also in the form of a cup-and-handle reversal, there is no other bullish reversal that has a reversal over 5 decades.
Remember, there is a saying that goes “the longer the base the higher in space” which really means that there is more bullish energy the longer the bullish consolidation (reversal).
Stated differently, silver, having the longest bullish chart reversal, qualifies as the asset with most upside potential this decade.
RELATED – When Will Silver Hit $50 an Ounce?
Silver rallies every decade
Silver has a track record of staging a rally, at least once per decade. In fact, whenever silver stages a rally, it ‘pumps’ hard, really hard.
Since the major top which was set in 1980 silver was able to stage exceptional rallies in these years:
- 1982
- 1987
- 2004-2008
- 2010-2011
- 2020
What stands out it that most of these years coincided with good year in stocks.
In other words, silver needs a stable stock market in order to stage its typical secular breakouts and double-digit to triple-digit rallies.
Interestingly, as we head into 2024, the stock market is showing signs of stabilizing and moving higher.
No surprise, we identified silver when analyzing the question which precious metal to buy for 2024. Without any doubt, silver is the strongest of the two precious metals going into 2024, 2025, 2026. In one of those years, silver will be touching $50. We are convinced that silver will exceed $50 before the end of 2026.
One of the many reasons we believe so is the typical, historical pattern we see when analyzing the gold to silver ratio. We discuss the gold to silver price ratio in one of the next sections. In all instances when the gold to silver ratio exceeded 100x, it came with an historical silver rally soon after.
Note that we re-iterated our bullish silver prediction:
The price of silver will move to our first bullish target of $34.70 in 2024. We predict $48 soon after, in 2024, not later than mid-2025.
Silver 50-year price chart: A secular bullish reversal
Silver’s 50-year price chart has this unusually long (hence strong) cup-and-handle formation.
When carefully analyzing the chart structure, we see a few characteristics worth calling out:
- The peaks of 1979 as well 2011. They frame up the giant ‘cup’ formation.
- The flat range in the 80ies and 90ies.
- The non-stop decline since 2011 which only accelerated in 2013. This bottomed between 2016 and 2018 with a big double bottom.
- The breakout of 2019 shows suggests the ‘handle’ formation is underway now.
What does this cup-and-handle suggest? This is how we interpret this chart:
- Silver turned its 8-year downtrend (previous decade) into an uptrend (this decade).
- This uptrend is likely going to last for a comparable number of years, notably 8 years (approximately).
- Assuming 2019 marked the start of the new silver uptrend, we expect silver to exceed all-time highs in 2025-2026.
- It is fair to assume that $50 will be touched before 2025, arguably in 2024 (certainly not later than 2025).
Early 2024, we observe relevant insights from silver’s 50-year price chart:
- Silver confirmed its 8-year reversal pattern, in 2020, and is now clearly in the ‘bullish side’ of the long term bullish reversal.
- The consolidation since summer of 2020, in the meantime, more than 3 years, is close to switch to a new uptrend.
- Based on other chart timeframes, the real breakout of spot silver is $25.
- We believe that silver will exceed $25 before 2024 kicks off, opening the door for $34.70 in 2024.
We believe that silver will trade around $34.70 in 2024 which is our silver price prediction 2024.
October 6th, 2024 – The silver price chart over 50 years shows how a secular breakout of the cup and handle formation is in progress. This is a quarterly chart, one candlestick representing one quarter, so it’s too early to tell whether the secular breakout will be confirmed this quarter. Regardless, from a long term perspective, the chart pattern looks powerful and reliable which implies that there is a high probability that silver will move to $34.70 – $37.70 in 2024. The most bullish, but low probability outcome, silver may move to $48.00 in 2024.
Needles to say: we need a spot silver chart to cover a 50-year time period, not the futures chart.
Silver price chart on 20 years
We feature two more silver charts, both over 20 years. Both of them have an insight which is complementary to the 50-year silver chart.
First, the 20-year silver chart with the most basic trendlines annotated shows that silver is very, very close to a breakout point. In fact, we derive $25 as the secular breakout point of this 20-year chart structure.
October 6th, 2024 – The silver price chart on 20 years clearly points to a target area of $34.70 to $37.70 to be hit somewhere towards the end of 2024. The most obvious, if and when this happens, is a pullback which should gather bullish energy for silver to move to the $48-50 area.
Let’s put it this way: the probability of silver closing above $25 before 2024 kicks off is extraordinarily high. If this happens, we believe silver is able to run to $34.70 not later than May of 2024.
Gold to silver price ratio on 50 years
Below is the gold to silver price ratio over 50 years.
This ratio acts as a ‘stretch indicator.’ It helps us understand when the price of silver is undervalued vs. overvalued relative to the price of gold.
The horizontal green line is the important level: 92 points.
Any time, in history, when the gold/silver ratio achieved 92:1, it pushed the price of silver much higher. In some cases it took a few years, in other cases a few months, before silver became explosive.
October 6th, 2024 – The gold to silver price ratio over 50 years suggests that the ratio will hit 40x at ‘a’ certain point in time. This, if materialized, should push the silver price much higher, closer to the 50 USD/oz area.
Will the developing silver shortage push silver higher?
One question that comes up frequently is why the price of silver is not trading closer to its ATH.
In the end, all commodities went up to their 2007-2012 peak.
Moreover, with silver experiencing a supply deficit, it just makes so much sense to expect a big bull run in the silver market. Even Reuters mentioned that industrial demand, particularly in solar, will continue to rise.
To be honest, our viewpoint is that all conditions are in place for silver to run to its two higher targets:
- $34.70
- $50.
The question why silver is not trading at those levels is a good question to ask. The ‘silver manipulation’ theme comes up as an answer. Concurrently, the other answer that comes up is ‘opportunity’: if an asset is undervalued, it usually is a matter of time until a rebalancing act occurs.
Eventually, given all the data points outlined in this article, we believe that silver will move to those higher targets. Especially the immensely strong bullish reversal on the 50-year silver price chart makes us very confident about our silver forecast.
October 6th, 2024 – The ultimate confirmation of a silver shortage is evidenced by M&A activity in the silver mining space, with Coeur Mining acquiring SilverCrest, which created this headline Industry silver demand is rapidly rising.
Weekly gold & silver analysis
We offer detailed gold & silver price analysis, as a premium service, covering every week leading indicators of the gold price and silver price. Premium service: Gold & silver price analysis >>
