This time of the year most of us are done with 2022 and slowly but surely starting to think about the new realities of 2023. As our main focus at Precious Metal Bars is silver, it stands to reason that our first order of business is to inform our investors on the expectations of the silver price for this year. Before we continue I would like to draw your attention to my last article “Why Is Silver Falling” dated 4/09/22. I stressed that we were looking at a excellent buying opportunity here. At the time the silver price was trading at around $18.60 and a 1 kg silver bar was R13,420.00. Today the silver price per ounce is $23.81 and a 1 kg silver bar today is R16,987.00. That is a 28% increase in 4 months. After all my years in the precious metals market, I have learn this profitable lesson especially for silver, and it is “Do not wait to buy silver, buy silver and wait”
The only question of course that matters now is, where is the silver price going in 2023? There are 6 main reasons on which I base my silver price prediction.
The up trending gold price. Silver tends to follow the gold price. The gold price increased from $1616 on 30/10/22 to $1895 on 13/01/23. Silver went up from $18.60 to $23.81 on 13/01/23
The Euro. The Euro has an inverse relationship with the US dollar. The strengthening euro will put the us dollar under pressure and push the precious metals prices higher.
Silver Paper to real silver ratio. The real silver to paper silver ratio is now at 418:1 as opposed to 182:1 a year ago. That means for every real 1 oz of silver, 418 paper ounces of silver are traded. This is the same as building a house on sand.
The world inflation expectations. The world stock markets might well be in a slow puncture mode for the next 12 months. This will force investors to move money into precious metals.
Physical Silver Shortage. It is a well documented fact that the silver mines are producing less and less silver since 2019. The reasons is declining ore grades and hugely increased energy costs thanks to the Ukraine/Russia war.
Based on the important issues mentioned above, I do believe that the silver price is certain to break the recent high of $30.00 and go up to $34.00 very soon. Once this $34.00 level is breached it will only be a matter of time for silver to approach the $50.00 mark. We must not forget that silver is notorious for running hard and fast.
The price graph to the left clearly shows how fast the silver price can move once it starts running. When this happens, you should own silver already because it will be difficult to get stock when the prices are moving up fast.
During my research I came across a very interesting article by Patrick Karim. He is a world renowned gold and silver aficionado. He has supplied us with a very interesting graph to show the silver price on the verge of a huge price breakout. He is adamant that once the silver price breaks $28 we will see all time highs within six months. You can read his article here.
In closing it is not important what an asset cost today. What is important is where the price of that asset is going in the future. Gold and silver will always go up over a period of time. That is why investors are using these metals to hedge the buying power of their money. May I remind you that the first Krugerrand that came out in South Africa cost R28.00. Today a Krugerrand is R33,200.00. Silver has increased by even more. Silver in 1967 was $1.29 per ounce. Today it is $24.20.
Silver should definitely be in your investment portfolio.
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