CPM Group expects silver prices to rise sharply at some point over the next two years. In fact, CPM has been projecting that such a sharp jump in silver prices would develop around this time since at least 2013.
There are real and strong reasons to expect silver prices to rise sharply at some point over the next couple of years. These primarily center on increased investor demand for physical silver. All past periods of sharp increases in silver prices have been driven by surges in investment demand.
The chart below illustrates that a surge in investor demand has been the factor behind every silver price spike since the 1960s: in 1978 – 1980, 2005 – 2011, and again beginning around 2019. In the 1960s investment demand was so strong that it caused the U.S. Treasury to remove silver from circulating coinage and stop issuing silver-backed Silver Certificates as paper currency.
It always has been a sharp increase in investor demand that has propelled silver prices higher. Strong fabrication demand and supply trends have helped create a market environment supporting higher prices, but it was the sharp increase in investor buying that pushed prices higher. That has been the history, and it is likely to be the case over the next couple of years.
The research staff at CPM Group has produced long-term studies of silver supply, demand, and prices with 10-year projections since the early 1980s. Most of these reports since the late 1990s are available in CPM’s archives. The October 2013 Silver Long-Term Outlook report projected a nominal annual average silver price of $36.96 for 2022. The annual price in 2022 in fact was $21.81. That 2013 report also projected that the annual silver price would fall to $19.75 by 2016. In fact it dropped to $15.69 in 2015.
This CPM Group Market Commentary was sponsored by Silvercorp, one of the premier silver mining companies. We would like to thank Silvercorp for making this paid CPM Group research available free of charge. Silvercorp offers investors exposure to silver production through its enhanced leverage to the metal. The Company’s mines have been consistently profitable, further bolstered by rising silver prices.
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