Silver Prices Move Higher

After trading sideways for most of last week, silver prices surged higher by more than $2/ounce last Friday. This breakout of the current consolidation pattern has been long awaited and anticipated, but it sure was nice to finally see happen.

Where Will Silver Prices Go Next?

So the question now becomes...where does price go from here? We tried to get ahead of this question two weeks ago with our weekly column that was written and posted on October 7. The idea behind that post was to get ahead of the breakout and get you thinking about where prices may head next, both later this year and in 2025. You may have missed it, so here's a link: 

• https://www.sprottmoney.com/blog/price-goals-for-comex-silver

The breakout has now happened, and the daily chart looks like this two weeks later:

Silver - Daily Candlestick Chart 

Silver Market Forecast: What to Expect Next?

So what should we expect to happen next? Will silver prices continue to rally and move higher or will price soon fall backward? Of course, that's impossible to say for certain as many forces impact price on a daily and intraday basis. For example, if over the next few days, the U.S. dollar index surges higher and toward 105-106, the HFT algo trading machines that dominate COMEX trading will react by selling COMEX silver futures. That's just how it works. Check the trade thus far on Monday, Oct. 21. After an initial surge in buying by human beings following the COMEX open, The Machines soon took over and drove the silver price backward as the dollar index rallied.

U.S. Dollar Index & Silver 1 Minute Candlestick Chart

But that's just today. What if the dollar index simply turns around and heads back down tomorrow? So for this week's column, let's again address the importance of last week's breakout and see if we can project where silver prices might head from here.

Let's start with the weekly chart...but not of COMEX silver. Let's look at COMEX gold instead. Why? Notice that the COMEX gold price had its own breakout back on Dec. 1, 2023. After trading sideways for over three years, price finally blasted higher above $2000/ounce as December began. However, and this is important, it then consolidated in a "handle" formation for thirteen weeks before it finally broke $2100. 

Gold Weekly Nearest Candlestick Chart

And look at what happened after the breakout of March 1. The gold price moved from $2100 to $2400 by mid-April. That's about 15% in six weeks. From there, it consolidated again before breaking out to its current price north of $2700/ounce.

Now look at the chart below. The COMEX silver price had followed its own four-year consolidation, with price unable to break free and clear above $28/ounce. Once it did back in May of this year, price then consolidated in "handle" formation for seventeen weeks before it finally broke out decisively on Friday.

Silver Weekly Nearest Candlestick Chart

Silver Price Prediction for 2025

If this breakout in silver follows the pattern set by gold earlier this year—and if you figure that silver should move about 2X versus gold—then an initial target for this first stage of the rally is somewhere near $37-$39. Sounds good to me!

But then what? Is that it? Will the silver price just fall backward from there or will it keep moving higher? Well, if you've followed the silver price for any length of time, then you already know that it never moves UP in a straight line. Down maybe, but not UP! So we know there will always be pullbacks and consolidations in a bull market that almost always unfold in a two-steps-higher-and-one-step-lower pattern.

Next year, though, should bring the next set of highs for silver prices, with the ultimate goal being a return to the all-time highs near $50/ounce. The monthly chart suggests this likelihood, and we'll end this week with an updated version of the chart we included in that post from two weeks ago.

In consulting these long-term charts, we can easily spot potential areas of future price resistance. However, given the symmetrical nature of the "cup" pattern seen below, the chart seems to suggest that the goal of $50 silver is certainly attainable sometime in 2025.

Silver Monthly Nearest Candlestick Chart

It's a fun time to be a precious metals enthusiast, and it's always a good time to buy physical metal and add it to your stack. Don't let the current price discourage you as higher prices look likely in the weeks and months to come.