Our annual silver price forecast is here. It is one of those important forecasts we write because of our track record in precious metals forecasting. Silver, along with gold, started a new secular bull market back in 2019. Since then, silver experienced several bull runs and got hit hard during the Corona crash. What is truly important is the really long consolidation that started in August of 2020. We believe 2022 will bring resolution for silver. We strongly believe that our 2021 forecast for silver (higher 30ies) is simply delayed. Consequently, we believe that we should set the 2022 silver target even slightly higher. Our 2022 forecast for silver is bullish but we need the USD to first run its course before both silver and gold can resume their uptrend. Moreover, it will not be an entire year or bullish price action, but more of a pressure cooker period that resolves to a strong (maybe even sudden) bull run. We believe silver will accelerate mid-2022 together with gold, in a period where broad stock markets will be flat.
InvestingHaven’s research team publishes for many years market forecasts. The annual gold prediction as well as silver forecast are the most popular ones, read by millions of investors over the years.
Why This Silver Price Prediction?
What we are really interested in is catching those major moves in silver. That’s the reason why silver is top of our tracking list.
We write a lot about silver both in the public domain (silver tag) but also in our premium services.
Silver has a track record of running very hard and fast, in both directions. There is a very good reason why silver is called the restless metal.
2021 has proven that all leading indicators may suggest a silver bull run to start but still it did not happen. On the contrary, the long and rather aggressive consolidation continued for another full year in silver.
There are 2 ways to look at this:
- Eager and patient.
We go for option #2 because what we do know from history is the length of consolidation determines the power once a new trend starts (in both directions, it is).
Assuming silver will succeed in breaking out in 2022 it suggests a really powerful move will follow. We don’t want to miss this, and certainly want to ensure premium members across our services will be among the beneficiaries.
We highly recommend to sign up to our free newsletter to follow our work and catch the silver rally we expect to start in the first half of 2022.
4 leading indicators for our silver price predictions
We work with a limited number of leading indicators for our silver price predictions:
- The price of gold as it is leading in bull runs (except in the last phase of a secular bull market).
- The Euro (inversely correlated to the USD).
- Bond yields.
- The futures market positioning (CoT).
There are two ways to look at these 4 leading indicators which we use in our silver price forecasts:
- One way to think of it is “that’s a lot” or “really complex”. That’s indeed what it is, rather complex.
- The other way to think of it is “that’s a lot of pieces of the puzzle that need to be set right.” True as well, silver needs to have ‘its ducks in a row’ before it can deliver those amazing returns that have created small fortunes to a small group of investors.
We believe that it is crucial for success not to chase the silver market. Investors need to give the silver market the time it needs. That’s because the returns are worth the wait!
Our silver price prediction for 2022
We look at the silver charts, we look at the leading indicators for silver (and gold), we try to create this mental picture of what 2022 is going to look like… we conclude that there will be room for a big silver bull run.
- The USD is very strong going into 2022. In fact, it is the USD that spoiled the silver party in 2021. All leading indicators were lined up for a silver bull run in 2021. It did not happen… because of the USD.
- The USD will stop rising at a certain point. Whether it will be flat or falling in 2022 we cannot know. All we do know is that precious metals will perform well after the USD rise because ‘the market’ will know that the USD won’t be able to push back precious metals any longer.
- All we need is bond yields to come down or stay flat. This may happen after a steep rise of bond yields OR a breakdown.
- Considering the market conditions outlined above we believe silver will outperform each and every other market in a specific period in 2022 which is when stocks will be struggling (because of falling bond yields and a flat USD).
- We do know from history that silver typically runs in time windows of 3 months.
The only question is which 3 month cycle exactly will the market pick to push silver to our target of 40.7 USD?
Silver charts that support our forecast
We start with the daily chart(s).
This is the simplest view on the silver price. As seen, the higher areas (green shaded area) were not able to hold throughout 2021. This implies that a strong bullish reversal should be created in the lower areas before an attack to those higher areas can be successful.
This is a different view on the same chart: the 3 month cycles which are dominant in the silver market.
Note that the difference between both charts, even though based on the same daily timeframe, is the axis we analyze: time axis vs. price axis. Here is the point: both are equally important. The entire world may be focused on price analysis (y-axis) but our method goes into both price and time axis analysis.
The 5 3-month cycles since summer of 2020 have been pretty violent: 3 bearish cycles, two neutral cycles (turning points, in grey on the next chart).
The silver market needs to shrug off sellers before buyers can take over control.
We have to wait for a bullish reversal completion below 24-25 USD in order for bulls to start taking over control over the silver market.
The weekly chart puts the ongoing reversal in perspective. Pretty bullish, isn’t it? We need the 24-25 USD to be cleared is what the weekly says, no surprise it confirms the conclusion we derived from the daily.
The monthly puts the rejection of early 2021 (in the 27-28 area) into perspective. It was too early for silver to break out. The ugly breakdown candle from April 2014 could not be taken out so fast. A long bullish reversal is required before the March-April-May 2014 breakdown can be cleared.
The quarterly over 50 years shows how impressive the long term cup and handle reversal is.
Silver qualifies as the strongest, longest, most powerful reversal in global markets, without any doubt.
Let us say this again, because it is crucial:
Silver qualifies as the strongest, longest, most powerful reversal in global markets, without any doubt.
In case you didn’t realize silver is going to breakout at a certain point in time. The above quarterly silver chart over 50 years will become insanely bullish. Investors that will miss the big silver run will be saying “how comes we missed it.” The one and only right answer: “because you were not following InvestingHaven’s work.”
Silver’s leading indicator #1: Gold
Out of the charts we featured in our gold price forecast (hyperlink in the intro) we believe we want to pick out this one (quarterly gold chart over 50 years):
What a bullish chart this is. And how clear is it that gold will break out in the not too distant future.
Do you see the divergence between gold and silver on the longest timeframe? Silver is so much behind gold. This means one and only one thing: silver has so much more to make up for. Yes, the big gap between gold (near ATH) and silver (50% below ATH) will be closed at a certain point in time.
We are not going to miss the silver party, rest re-assured!
Silver’s leading indicator #2: Euro (USD)
Precious metals need a rising Euro (falling or flat USD) in order to shine.
If we look at the Euro chart on the longest timeframe we can see that the Euro is likely going to hit rock solid a support area. This will not morph into an uptrend instantly, that’s impossible. But we can reasonably expect the first half of 2022 to get a stronger Euro trend which will be great for risk assets (stocks) and support precious metals.
We want the Euro to confirm 112 with a W reversal, and start moving above 115 after the 2nd leg (confirmation) for a direct impact on gold and silver.
Silver’s leading indicator #3: Bond yields
Bond yields are inversely correlated to precious metals. They are not as strong a leading indicator as the Euro. Silver (also gold) should be able to rise when bond yields are range bound.
The weekly bond yields chart is now in a narrow range. Any fast move higher will keep gold down or flat. A slow rise or range bound setup can support a silver bull run.
We expect silver to create a bull run when the Euro starts rising on falling bond yields. This will come after a period of rising bond yields. That’s also a good setup for a weak stock environment: after a rise in bond yields and accordingly rising stock prices in 2022 we expect both to retrace. IF this happens on a rising Euro it would create the perfect environment for silver to start a bull run.
Silver’s leading indicator #4: Futures market (CoT)
Here it becomes interesting.
The way to think of this leading indicator for silver (also gold) is a stretch indicator:
- When net positions in the futures market of commercials and non-commercials are stretched it indicates that price is going to take a turn.
- This is not a timing indicator, we need the silver price chart to determine the timing of a turning point.
- Right now, as per the data on the center pane (blue and red bars) we see that commercials and non-commercials have been growing their net positions rather fast. This is not a setup for rising silver prices.
- What we want to see in 2022 is the red and blue bars hitting really low levels. As the silver price starts rising we want to see a very slow process of growing bars. This translates into net positions that grow slowly, and because this is a stretch indicator it means that it will take time (also much higher prices) before futures market participants will ‘cap’ the silver rally.
In other words the evolution of the chart (middle pane) is not a great setup for strength in silver prices. We need a different setup the futures market in 2022, combined with a rising Euro, for silver to really start shining!
Silver price forecast 2022: conclusion
That was a lot information to take in, so let’s ensure we get to a very clear and simple conclusion:
We have a bullish silver price forecast for 2022. We expect one bull run in silver in 2022, maybe a second one (if not it will be in 2023) which will bring the price of silver to 34.70 USD. Depending bullish momentum we can consider a more bullish target in that same bull run which is 40.70 USD. Whenever the 2nd bull run takes place we will see an attack of ATH, it may be in 2022 or in 2023.
Moreover, the conditions that we need for this bullish silver price forecast to work out:
- Rising Euro, especially after hitting a double bottom in the 112 area and after clearing 115 points (Euro index).
- Flat or falling bond yields which might come after a strong rise or because of a breakdown.
- Net positions in the silver futures market should fall to multi-year low levels, and not rise fast as the silver price starts rising (whenever that moment will be).
So that’s quite a few conditions that need to be right for silver to start shining.
One important thing is the invalidation scenario that must come with any prediction. We believe that our bullish silver (also gold) forecast will invalidate if the Euro remains weak (below 115 points, so strong USD rising to +110 points in 2022). If 2022 will be a year in which bond yields will not come down (only flat or rising) it will be hard to think of a bullish precious metals market.
Our track recording predicting the price of silver
For 5 years in a row our silver forecasts were phenomenally accurate. They are all still available in the public domain on our blog, and the table below depicts the summary of each year’s silver forecast with the highs/ lows per year.
Interestingly, InvestingHaven’s research team has been spot-on with its gold price forecasts for 5 consecutive years. However, our silver forecast 2021 of the higher 30ies did not materialize. After 5 consecutive years of spot-on silver forecasts we did miss in 2021.
How comes? The reason for this was explained in our gold forecast. The reason why we missed our gold price forecast in 2021 applies to our silver forecast as well.
This is an overview of our silver price forecasts from last year. We publish these forecasts many months prior to the year that we forecast. Prices reflect silver's spot price.
Our silver forecasts have been highly accurate because we have always applied an accurate forecasting methodology. It is based leading indicators: TNX, USD, futures market (CoT report).
In 2021 the intermarket readings were absolutely accurate; they justified a silver bull run. Bond yields did fall close to 40% at a certain point while the USD was rather flat. There was no silver bull run while any other point in time in the past gold would have been rallying in those circumstances.
This suggests that either our method stopped working OR our forecast is postponed. Based on the charts and leading indicators of our gold 2022 prediction we believe it is the latter. Our 2021 silver forecast came just a little too early, consequently we believe our silver forecast will exceed our price targets in 2022.
Remember, the longer a consolidation goes on the more powerful the subsequent trend.
So we remain convinced that our silver price forecast of 2021 which was $2,200-$2,400 remains valid, however it is postponed (not invalidated). Our market readings suggest that silver will move higher but once the USD is done rising and when bond yields will be flat to mildly bullish in 2022 (maybe even when they will be falling).
|Year||Our silver forecast||Highs||Lows||Forecast accuracy|
|2017||Neutral, price target of $15||18.65||14.41||Spot-on|
|2018||Neutral, no breakdown||17.68||13.91||Spot-on|
|2019||Bullish with price target of $20-21||19.64||14.30||Spot-on|
|2020||Bullish with price target of $22||29.64||11.65||Spot-on|
|2021||Bullish with price target of $37||30.37||21.42||Missed|
Our #silver price forecast for 2022 is bullish with a price target of 34.70 USD. With good bullish momentum $SILVER can continue its move to 40.70 USD. The bull run that will follow will attack ATH, this may be in 2022 or 2023. Click To Tweet
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