Can Projections of $100 Per Ounce For Silver Be Justified?
Lorimer Wilson | Oct 18, 2019 09:33
Once again, people are giving voice to expectations of silver suddenly rocketing much higher – but why?
Even after its recent price rebound, silver is 65% cheaper than it was eight years ago.
In January 1980, the price of silver peaked at $49.45 per (troy) ounce (the equivalent of $163 per ounce in today’s dollars), which represented a 39-times increase in little more than eight years from its low in October 1971 at $1.27. There was talk about higher silver prices, as much as $100. per ounce and more, yet, only a few months later, silver was down to $10 an ounce, which amounted to a decline of nearly 80% from its peak.
At today’s price of $17.50 per ounce, however, silver needs to increase by almost 500% to reach the $100 mark and it needs to be at least $163 just to match its January 1980 high. Think about that. Even if it manages to reach the vaunted $100 price, silver will still be 40% cheaper than it was 50 years ago.
The next time you hear that silver’s big day is just around the corner, ask yourself what has changed. Silver’s fundamentals are not much different today than they have been for the past half-century, and silver’s price history doesn’t indicate anything that supports or justifies projections of $100 per ounce and higher.
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