In a report published at the end of October, analysts at Metals Focus said they see silver prices going "well above" $30 per ounce. They anticipate silver to get an upward momentum after the results of the US election are known: "Almost irrespective of the outcome of the US election, fresh large-scale fiscal and monetary stimuli seems inevitable, given an uncertain economic recovery and still high Covid-19 cases. The same may apply to Europe where record infections and new lockdown measures have also cast doubts about the solidity of the anticipated economic recovery. The case for silver (and gold investment) will therefore remain strong."
"This is the main assumption behind our forecast that the silver price will break through the $30 mark during 2021."
While Metals Focus’ long-term silver prices forecast is bullish, they still warn investors of the possible near-term volatility: "A slower than expected economic recovery and still elevated unemployment rates globally will continue to weigh on the recovery in industrial, jewellery and silverware demand."
In September, CIBC bank also predicted the metal to appreciate, estimating silver prices to reach $32 per ounce in 2021, and then slide to $31 per ounce in 2022 and $30 per ounce in 2023. As for the shorter-term, the commodity is expected to average at $28 per ounce in Q4 2020.
CIBC analysts explained: "The outlook for continued low real interest rates, increasing government debt burdens coupled with geopolitical uncertainty arising from the upcoming US election are all supportive of further significant price appreciation."
Analysts at Citi (C) are also optimistic about the metal’s future. The bank’s silver rate prediction is $40 per ounce over the next 12 months, with the growth driven by a combination of robust investor demand and a recovery in industrial demand.
The analysts wrote in their advisory note: "We expect that investor demand for precious metals exposure will remain high during 2021 as pressure on governments to devalue currencies, concerns about vaccine efficacy and take-up rates and questions over equity and bond valuations and rising global debt remain in most scenarios."
The bank also added that its foreign exchange technical team sees the potential for silver to reach $50 per ounce, or even surge higher – up to $100 per ounce – in 2021.
Goldman Sachs (GS) also believes 2021 to be a good year for the commodities market, recommending investors to go long on silver, gold, copper, US natural gas and Brent Crude oil.
Predicting a return of 30 per cent on the S&P’s GSCI (Goldman Sachs Commodities Index) over the next 12 months, the analysts wrote: "We see trends in rising social need, alongside investor complacency over inflation, as raising the political risks of policy with an inflationary bias. Accordingly, we expect an increased rotation into commodities as an inflation hedge."
Another silver prediction comes from Capital Economics, whose analysts see the price of silver making moderate gains in 2021: "All in all, a market deficit in conjunction with a higher gold price should lift the price of silver to $25 and $27 per ounce by end-2020 and end-2021, respectively. Demand for non-interest bearing safe-haven assets, such as gold and silver, should rise as real yields in the US drift a little lower."
In the meantime, according to JP Morgan’s silver forecast, the commodity is set to trend down during 2021.
Based on the silver price forecasts from a famous online forecasting resource, Wallet Investor, the commodity will fall to end this year at $23.8 per ounce. However, it is then expected to end 2021 trading at $26.5 per ounce and appreciate to $31.5 per ounce by October 2025.
On the other hand, according to Trading Economics’ silver spot forecast, the metal is expected to trade at $23.48 per ounce by the end of this quarter and drop to $21.30 in the following 12 months.
Reference: Capital
Thai
Eng