In other words, the ratio is likely to fall and, therefore, the price of silver will rise. The ratio is also 28% above its 50-year average. These data suggest that silver is more likely to rise this year than to fall. It is also in line with data from the Silver Institute, which predicts that silver will continue to have a global supply deficit in the coming years.
Market participants interested in investing in silver would do well to consider these ideas when trying to determine where the spot price might move in the future. In addition, if the global economy falls into recession this year, industrial demand for silver could also be affected. While the silver price forecast is affected by supply and demand, it is also heavily influenced by investors who buy precious metals as safe haven assets during times of economic or political uncertainty. Global demand for silver is rising and is expected to hit a record high this year, offering investors the opportunity to buy the metal at prices that have changed little over the past six months.
The same is largely the case with gold prices, but silver is subject to considerably greater volatility than gold. This represents a gradual step forward by the government towards economic reopening, which benefits the price of growth-sensitive and industry-linked commodities, such as silver. In addition to the established industrial uses of silver in the field of electronics and medicine, silver will also play an important role in the industries of the future. Therefore, one of the driving forces behind the increase in silver prices over the next five years is the numerous applications of white metal in green technologies and the green economy.
After all, silver is a safe asset that generally does well in times of crisis, and the past year was plagued by tense geopolitical events along with the current COVID-19 pandemic. This allows us to get a better idea of whether silver is overbought or oversold in the trading markets. Jeffrey Christian, managing partner of the CPM Group, believes that while the prices of gold and silver may be suffering a short-term hit, investors with a longer-term market view may view this fall in prices as an opportunity. We recommend that you always do your own research and consider the latest news on the price of silver, market trends, technical and fundamental analysis, and expert opinion before making any investment decision.
All of this justifies the forecast that silver prices will rise by 50% or more by the end of this decade. Silver will also benefit from the reopening of the global economy after the coronavirus pandemic, given the increase in industrial production and the maintenance of investment demand, according to Max Layton, managing director of commodity research at Citi Global Markets.