A Silver Price Forecast For 2023

Silver will move higher in 2023 because we expect a top to be set in the US Dollar. Moreover, leading indicators like inflation expectations and certainly the CoT positions in the silver market are strongly bullish for 2023. That’s why our silver price forecast for 2023 is 34.70 USD. Note that this is our first bullish target, also a longstanding target that we expected to be hit in 2022. Once silver trades near 36 USD it will be a matter of time until it will attack ATH. In our gold forecast 2023 we mentioned that our preference goes to silver investments in 2023 and beyond. We also tipped silver as the precious metal to buy for 2023.

[Ed. note: We added one section on November 27th, with 2 additional data points that justify our bullish silver market outlook. Moreover, on December 4th, we updated all charts.]

We want to re-iterate our bullish stance about the silver market. Our silver price targets for 2022 were not met, not yet, although the market came very close to our first bullish target. Our silver price targets stand strong, the fact that they are not hit in 2022 means that they are postponed to 2023.

A Silver Price Prediction: Why?

What we are really interested in is catching the next really big move in silver that might bring it back to 50 USD/oz or even higher. That’s the reason why silver has a top spot in our watchlist.

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.

Silver came very close to a secular breakout in 2022, however the breakout was stopped cold by very aggressive (read: historic) monetary policy interventions in Q2/2022. Once the wave of monetary policy interventions will be over, which we ultimately expect as 2023 kicks off, we see the USD come down. This will make the silver market explosive!

4 leading indicators for our silver price prediction

We work with a limited number of leading indicators for our silver price predictions:

1. The price of gold (positively correlated to silver).
2. The Euro (inversely correlated to the USD).
3. Inflation expectations (positively correlated to silver).
4. The futures market positioning (CoT).

In 2022, we noticed how a strong rise in the U.S. Dollar and consequently big decline in inflation expectations broke the secular breakout in silver that started in Q1. However, the silver CoT report continued to improve to the extent that it became historically bullish in Q3.

We believe that all leading indicators will turn bullish for silver in 2023.

Our silver price prediction 2023

We turn to the silver charts to support our silver price forecast 2023.

As seen on the longest timeframe, the silver price chart over 50 years, there is a giant cup and handle in the making. This is a strongly bullish pattern, one that might take two more years to truly explode.

The area in green is the ‘handle’, it took some 6 years to create the first part of the structure. The consolidation is taking some 3 years now. We find it challenging to estimate the exact time required for this formation to complete. We can reasonably expect silver to move to the top of this formation (between 32 and 36 USD) in the 2nd half of 2023.

Silver charts that support our forecast

We start with the weekly gold to silver ratio over 50 years.

We explained the following in our public post One Silver Chart Justifies ‘Buy The Dip’ For Long Term Positions:

The gold to silver ratio says that silver is a screaming buy: the gold to silver ratio over 50 years! Take a look at the green line: any time, in history, silver achieved a ratio of 92:1 when compared to the price of gold, it started an epic turnaround. In some cases it took a few years, in other cases a few months, for silver to become explosive!

The gold to silver ratio chart over 50 years:

The 2nd chart that supports a higher silver price in 2023 is the correlation between inflation expectations (TIP), gold and SPX.

The decline in 2022 in all 3 of them is telling. We expect that all 3 of them will stop declining and turn up in 2023, and it should happen not later than March of 2023 (presumably much sooner). We explained this in: Why Markets Should Resume Their Uptrend The Latest In March of 2023.

With the correlation between those 3 markets in mind, we look at the current setups in silver / TIP / SPX.

Silver is setting a very strong inverted head & shoulders pattern, stocks are setting a double bottom (pending validation though), TIP looks to be consolidating.

We believe all 3 instruments will move higher in 2023.

Silver’s leading indicator #1: Gold

We expect gold to eventually move higher in 2023 because of the divergence between its leading indicator M2 (the monetary base).

We gave much more detail about the expected path of gold in 2023 in our gold forecast (link in the intro of this article).

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 find 2 bearish targets: 0.9666 and ultimately 0.91-0.92. The first one was hit, the second one might be hit (or not).

Stated differently, even though it might be that the U.S. Dollar has more upside (more downside in the Euro), we believe that there is more downside risk in the USD than upside potential. Pending validation and an important pre-requisite for our bullish silver price forecast 2023 to materialize.

Silver’s leading indicator #3: Inflation expectations

Inflation expectations are positively correlated to precious metals. They are a very strong a leading indicator, certainly when combined with the USD/ Euro effect.

The long term setup in TIP seems to be hitting a multi-decade low in the context of its rising channel. Can TIP move lower? While everything is possible, we see that the recent decline was equally large as the previous ones in 2008 and 2020. That’s why we believe TIP is about to start a consolidation and move higher in 2023.

The medium term chart of silver / SPX / TIP, shown below, makes the point: a turning point in all three markets is not far away. All three should resolve higher in 2023, even if they decide to continue their downtrend before 2023 starts.

Silver’s leading indicator #4: Futures market (CoT)

This is the most bullish leading indicator for silver, way before 2023 kicks off. This leading indicator will act like fuel in 2023 whenever the other leading indicators turn bullish for silver!

The way to think of this leading indicator for silver 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 extremely low net positions, historically low. This is a setup that supports rising silver prices.
• What we want to see in 2023 is the red and blue bars rising not so fast as the price of silver is moving towards 28 USD, the secular breakout point.

We recommend reading Ted Butler’s work who is the expert in reading the CoT report in silver. He also explains how price setting in the silver market is dominated by CoT. He is a lonely voice in pointing out how tight the physical silver market currently is, as we head into 2023, because of an epic turnover in physical silver warehouses.

Physical silver market: physical shortage in 2023

Editorial note: This section added on November 27th, 2022.

As discussed in Silver: A Divergence Of Epic And Historic Proportions there is a shortage developing in the physical silver market. Source: Global Silver Demand Forecast to Reach a Record High in 2022.

According to The Silver Institute) the global silver market should record a deficit in 2022. “At 194 Moz, this will be a multi-decade high and four times the level seen in 2021.”

As seen on the table which depicts the supply/demand situation in the last 10 years, it becomes clear that 2022 will be year with an epic physical market shortage. The strength of the physical shortage is the one conclusion that stands out, see red annotation.

As said, “this physical market imbalance (supply shortage) is historic, it’s not just a big supply shortage jump of 4x against last year.”

Silver price chart: a bullish reversal is almost complete

Editorial note: This section added on November 27th, 2022.

We use the daily silver price chart from Finviz, not a logarithmic chart, without annotations.

What do you see?

A very, very bullish reversal setup. The 21.50 to 22.00 USD level comes with resistance, the 19.00 to 20.00 USD level is support. But, more importantly, the entire structure between 18 and 22 is one giant bullish chart structure!

Silver price forecast 2023: conclusion

That was a lot information to take in, so let’s ensure we get to a very clear and simple conclusion:

1. Leading indicators Euro and inflation expectations turned bearish in Q2/2022, pushing silver lower.
2. The silver CoT turned extremely, historically bullish as we head into 2023.
3. Once the Euro and inflation expectations start rising, we silver see taking off.

That’s why we see silver easily moving to 28 USD in 2023 and moving to our first and longstanding bullish target of 34.70 USD. Our silver price forecast 2023 is 34.70 USD. Whatever happens at that price point will inform us about the intention of silver to attack ATH, presumably beyond 2023.

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, in 2021 and 2022, the price of silver came close to our silver forecast but eventually did not materialize.

We firmly believe that our silver price forecasts of 2021 and 2022 will materialize in 2023. Our longstanding targets are 34.7 and 40 USD, they should be met and probably exceeded not later than 2024.

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 price forecast for 2023 is bullish with a price target of 34.70 USD. Silver’s leading indicators will turn strongly bullish in 2023. We see $SILVER and $SLV attacking ATH not soon after 2023. Click To Tweet

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