Silver Price Forecast: Expect Higher Silver Prices In 2017 And Beyond

January 2, 2017

silver bars

In May 1970, my dad gave me a book to read: Harry Brown's “How You Can Profit From the Coming Devaluation.” It was a clear explanation of why Budget Deficits, Trade Deficits, and FED Money Printing were killing our country.

The major conclusion was that to protect the real value of your life savings from the ravages of the imminent Inflation, gold – and by extension silver – would be the place to be for the next generation.

In 1968 the US had stopped using silver in the last of the silver coins (40% silver half dollars) and had reneged on the Silver Certificate Paper Dollars. And, the London Gold Pool, which was a Central Bank effort to maintain the then $35/oz official Dollar price for gold fell apart. As a result, both silver and gold began to appreciate compared to the Dollar.

The long bull market in gold and silver ran until 1980 with gold prices topping $850/oz and silver above $50. The length of the bull market, depends on who you talk to. Colonel EC Harwood called the start in 1958, the end of silver use in the US and the end of the London Gold Pool would put the bull market's length at 12 years. Furthermore, Adam Hamilton has identified Long Valuation Waves for stocks and for Precious Metals says it has averaged 17 years.

Many of the factors that I read about in the devaluation book are visible today – with a vengeance.

  • The FED has embarked on money printing to a MUCH greater extent than it did in the 1970s Gold & Silver Bull
  • The US Balance of Trade has been extra negative for decades
  • US Budget Deficits have saddled our country with an official National Debt of $20 Trillion.
  • The Off-Budget US Obligations through the various Entitlement Programs have expanded the Real National Debt well past $200 Trillion.
  • Neither Major Party still even understands the Budget Deficit problem. (1970s Republican Congresswomen Marge Roukema campaigned on a slogan of “Reduce the Rate of Growth of the Budget Deficits.”) We'll see what President-Elect Trump can do.
  • Interest rates have been held at obvious negative levels, when accounting for price increases, for 10+ years! This distorted Price of Money has made optimum business decisions quite difficult. Just look at the current borrowing to buy back Bubble level stocks!
  • The BLS and other official numbers agencies have increased their lying. Starting at least as early as the Reagan administration, Americans have been deceived into thinking that the US Economy was doing fine. Contrast that to the reconstructions of what the CPI and Unemployment numbers would have been if the old calculation methods from 1980 still were in effect.

The current precious metals bull market started around 2000, just as the “.com” stock bubble was bursting. That would make it about 16+ years old. I expect that the current silver bull still has another 4-5 years to go.

So, if I am right, how high might silver go? The 1970s gold bull sent gold up 24 times, from $35 to $850. The 1970s silver bull almost doubled gold's returns, going from (the official) $1.29 to over $50! (Some people might say that the Hunt Brothers made the 1980 silver peak so high, but today I would point out the Goldman Sachs already has accumulated much more silver than the Hunt Brothers (according to Ted Butler).

During the 1970s, gold went up 24 times. Applying that to this bull, gold could go from the $250 low to around $6000. Silver previously went up almost 40 times, which could translate to a silver top around $180.

But the US Economy looks worse off to me than in 1970, so I would look for somewhat higher numbers – maybe a top for gold around $7,500 and for silver closer to $300. (I still would use the $6000 and $180 numbers as targets, so as not to overstay the metals bull.)

With interest rates starting to move higher, causing stocks to retreat, that also means a resumption of the metals bull.

Since silver still has more profit potential than gold, I would concentrate more on silver – and especially stocks of silver miners.

For this new year, I think it is reasonable to expect silver prices to reach between $20 and $25. For next year (2018), the advance could put silver in the $25 to $40 range.

I've suggested fairly wide ranges because short-term, prices are an educated guessing game. I re-entered my gold and silver positions (mainly miner stocks) back in 2001. To be sure I look mainly at long-term results. With most of the time for this bull already behind us, the long-term remaining is only 4-5 years. However, the steepest Dollar returns likely will come during the last year or two.

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The symbol for silver ‘AG’ comes from the Latin word ‘agentum’ meaning silver.

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