Silver Price Forecast 2014: Silver Prices Will Rise Dramatically At The End – Are We Close To The End?

launch rocket verticalThe real price of silver bottomed in 1931 and again in 2001, which could be described as a 70-year double- bottom. That is 20 years longer than gold’s bottom, quite a massive divergence. In 1980, for the first time since the first bottom, silver made an attempt to test the previous highs in place since the 1800s, and actually exceeded it for a while, which is typical of how silver can spike. So, silver actually technically did what gold did at least 40 years earlier.
After the second bottom of gold in 1970, gold started a rally that ended much higher than the previous highs of the 1800s. That is what rallies after valid double-bottoms normally do. Now, as I have said above, silver made the second bottom of its double bottom in 2001, and has started a rally since then. If it continues to follow what gold did, as well as what normally happens after a valid double bottom, then this rally will end much higher than the real highs of the 1800s.
Given the fact that silver has a tendency to spike much more than gold does, then we should expect massively high silver prices during this coming rally.

1 oz Silver Buffalo As Low As 79 Cents Over Spot at SDBullion!

Submitted by Hubert Moolman:

Silver or the silver price is generally much more difficult to analyze than gold. Part of the reason is that so much less is known about the specifics of the silver market. Silver analysis is often done “through” the analysis of gold. This is not completely wrong, since silver and gold mostly moves in a similar manner – they have the same monetary properties after all.

However, it must be understood that despite their similar properties, they have different monetary histories (the last 400 years at least).  These different histories have had the effect of causing silver to be scarce in a monetary form (silver suitable for pure investment demand like bullion), for example. The fact that few central banks hold silver, compared to gold, is another example of an effect that the different monetary histories had on these markets.

These and other differences affect relative price movements of gold and silver (especially with regard to timing and extent of price movement), and can often be seen on the charts. One example of such a difference that can be seen on the charts, are the fact that gold often bottoms before silver does. The current bull market started after gold bottomed in 1999, whereas silver only bottomed in 2001, for example.

These differences (divergence) can often be seen in all time frames (short-term to very long-term). However, the tendency for most people is to be aware of the short-term and maybe the medium term, but completely be ignorant of the long-term.

This kind of divergence, as you will see (later), is the reason why many look at silver and gold’s relative performance, and then make the conclusion that silver is not money, when the fact is that due to the significant distinct long-term timing; silver is at a different place than gold, on its way to be valued fairly.

I would like to illustrate that this divergence highlights why silver is such incredibly good value at the moment, and why the coming silver price rally will likely dwarf everything else. This is an aspect I have written about already.

Below, are very long-term charts of silver (top) and gold (bottom):

 

Long term gold vs silver

Silver Price Forecast – Silver and Gold different timing

 

  2014 Silver Eagles As Low As $2.99 Over Spot at SDBullion!

The blue is the real price, and the red is the nominal price of silver and gold. For this analysis, we will focus on the real price. On the gold chart, the real price of gold bottomed in 1920 and in 1970, which could be described as a 50-year double-bottom. In 1935 (point 1), for the first time since the first bottom, did gold make an attempt to test the previous highs in place during the majority of the 1800s.

On the silver chart, the real price of silver bottomed in 1931 and again in 2001, which could be described as a 70-year double- bottom. That is 20 years longer than gold’s bottom, quite a massive divergence. In 1980 (point a), for the first time since the first bottom, did silver make an attempt to test the previous highs in place since the 1800s, and actually exceeded it for a while, which is typical of how silver can spike. So, silver actually technically did what gold did at least 40 years earlier – again, a massive divergence.

After the second bottom of gold in 1970, gold started a rally that ended much higher (at point 2 in 1980) than the previous highs of the 1800s. That is what rallies after valid double-bottoms normally do. Now, as I have said above, silver made the second bottom of its double bottom in 2001, and has started a rally since then. If it continues to follow what gold did, as well as what normally happens after a valid double bottom, then this rally will end much higher than the real highs of the 1800s.

Given the fact that silver has a tendency to spike much more than gold does, and what I call: “silver’s short body long tail effect”; then we should expect massively high silver prices during this coming rally. When you compare the silver chart to the gold chart, you will see how silver often rises slowly for the majority of a significant rally (short body) but will rise significantly fast at the very tail-end of the rally (long tail).

So, this is telling me that silver is actually technically where gold was in the 80s. Furthermore, the fact that silver only bottomed in 2001, whereas gold bottomed in 1970 (30 years earlier), would in some way explain why silver’s behaviour would mostly cause people to believe that it is not money – at least not like how they consider gold to be money.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Hubert


Comments

  1. LMAO I start to read an article like this but I just can’t concentrate especially when the Spot is on a slide down. Lol  Yea I know eventually it will go up. Lol Keep Stacking

    • Hey Chuck,
      How are you? Have no more room to add to my secure stack. By the way, seems like Gold and Silver should have made some kickass moves to the upside with The Fed Minute report. I hope we are not going back to two steps backward and one step forward scenarios again. Seems to me that the news we get is all about inside the U S Box and not the Outside Box. The Outside news from RT.com and Reuters.com should be playing a hard handed favor in upward moves of Gold and Silver. Doesn’t make a lot off sense does it? Looking forward to more Banksters going the way of Jesse James!
      Ranger
       

    • Have no fear @Ranger Chuckie’s here. My Crystal Ball or Balls say’s we will be heading up sooner than later. I Hope. Lol Keep Stacking. My underwater safe can’t take no more. Lol

    • From the US MINT 2/3rd the way through Feb…..

       
      Silver Eagle $ales

      January
      4,775,000
      4,775,000

      February
      2,404,500
      2,404,500

      Total
      7,179,500
      7,179,500

       

    • With the mint rationing ASE’s of course numbers are down

  2. luciferians playing with fire lol

  3. Good article….But hard to see any logic in technical analysis when the prices are completely rigged, as we all know.

  4. Blah blah blah
    Im so sick of all this T/A analysis.In a manipulated market it is 100% useless
    There have been countless ta’s in the last 2 years predicting Silvers Accent.
    Everyone of them Wrong ..dead wrong.

  5. US Mint is utterly irrelevant due to the way it’s sales figures come to be. Please let we disregard them completely, find other sources to gauge retail demand by, and more importantly: send our fiat elsewhere, to better value bullion.
    20% of premium (of which zero taxes) is a bad investment in case of an ASE. When silver goes 5x to $100, you need $20 premium back on your precious shiny birdie to just keep up with spot silver.
    Over such a long time frame, bottoms are more significant than highs probably, because the centuries covered bring multitudes of inflation. this however makes the “body” part of silver’s rally graph somewhat insignificant, it’s at best making up for decades of inflation.

    • JonK  this is a good article   mega banks consume everything in their path, like locusts.   They are beyond the law, paying tithes to the government who slaps their wrists occasionally, to fatten the Gov coffers.  Pennies in fines for billions in profits used to buy everything.  A world ruled by bankers. Sheesh.  What a nasty thought   My opinion of bankers has never been good.  It’s worse now than ever.

    • @AGXIIK  Indeed. I’ve been talking about JPM since the late 1990′s when GATA and others exposed them for their role in the PM suppression efforts. I have only been able to wake a few people up over that time. It is remarkable to say the least. Sadly, we have posters here who still deny these clear facts. The Farce is strong in the Western world Bankster fraud of lies, corruption and deception.

  6. Sorry boys at the end supply an demand will be wiped out by a comex default. And also there wont be any time for the price to rise since the government game of a take over of the comex an a freeze in the prices will be the result of the end game stopping here. An if gold an silver takes off on the street price the government will just out law it to own. Opening the door to the new one world currency. There will be no safe place to put your money if the dollar.

  7. IMO, a double bottom is two sweethearts walking on the beach in Brazil.  :-D
     
    Tech analysis mattered when markets were operating via the fundamentals.  Not so much these days.  Fundamentals still matter but are not the primary driving force in years past.  Now it is manipulation by the Gov, the Fed, Wall Street, and Big Banks that matter.  Not that one cannot make money in this market.  People are still doing that but it is a lot trickier these days.
     
    When the SHTF, it will not matter one bit what we paid for our silver and gold.  All that will matter is “Do you have any?”.  If you do, then you will weather the storm better than those who do not.  MUCH better.  Asking someone if they have silver and gold will be equal to asking them today if they have money.
     

  8. “a double bottom is two sweethearts walking on the beach in Brazil”….great line, Ed.  Funny stuff.

  9. Moolman has not been a reliable predicter in the past. Nothing against making predictions but trying to do that in face of manipulation is kind of like spitting in the wind.  It will wing back and smack you in the gob

  10. Dang said: “An if gold an silver takes off on the street price the government will just out law it to own. Opening the door to the new one world currency.”

    I don’t think the government will outlaw gold and silver at all …. it is not like 1933 with thousands of tons of coined gold in circulation pus no government has never outlawed silver in recorded history … ever … and they couldn’t store it all if they did confiscate it (unlike gold). In addition silver is a widely used industrial/medical/jewelry metal and trying to regulating it would be a bureaucratic nightmare with little advantage to the government.

    Now as for the “new one world currency” that may eventually come true but that is in our distant future. The big bug-a-boo is determining the value of each countries valuation of assets. More likely smaller currency unions, like the Euro, will form first and have their shakeouts. these currency unions will form around efficient trading pacs such as NAFTA, ASEAN, or the new up and coming Russian led (LMAO more like coerced and dictated) customs union. The Russian “venture” brings up a good point, however as which country will lead the new currency unions … the obvious answer is the “big dog” both economically and militarily able to back it up. Germany is the economic powerhouse of Europe but their military is weak so they and France share that position and they both fight over financial policy making the overall currency weaker. There is no question if Russia or the US would dominate their spheres. The dominate force to create a common currency in ASEAN is in question but a currency consolidation will occur if mainland China continues to continues to press them economically.

    • Agreed…Public gold and silver is in no danger of confiscation.  Even in 1933, FDR did not ‘confiscate’ gold.  Gov’t paid spot plus a premium.  However, looking at today’s players.  China has far more gold than she lets on.  Probably close to 20,000 tonnes by the time you count all the dynasty gold accumulated and held for centuries.  U.S. has far less than the 8,000 tonnes claimed.  Currently, China is draining the West of her remaining gold.  Chinese really don’t need to accumulate more.  Politically, the Chinese like holding the hammer of a T-bill sell off over U.S. politicians.  China is building long term alliances with Middle East oil producing nations at the expense of the U.S. 

    • @UglyDog
       
      “Even in 1933, FDR did not ‘confiscate’ gold.  Gov’t paid spot plus a premium.”
       
      Yes, they appeared to do that but once the deal was done and the gold collected, those dollars got a 69% haircut by revaluing gold from about $20.67 per oz. to $35 per ounce.  Of course the effect on the citizens was a significant dollar devaluation and loss of purchasing power.
       
      An argument could be made that forcing someone to sell you something at gunpoint IS a confiscation.  How would any of us like it if the US Gov demanded our silver today and then said, “No, problem, we will pay you $22 an oz, for it”… and then 4 months later, they devalue the US dollar by 2/3, effectively making those dollars worth not $22 in buying power but more like $13?  :-(
       
      Of course, those who said, “Stuff the Gov and their gold grab”, and kept their gold back in 1933 got a 69% increase in the value of their gold.  There is a lesson in this that carries through to today.  The lesson is that those who submit to high-handed tactics of dubious constitutionality tend to get screwed while those who reject them tend to do pretty well.

  11. Here is an article I found last years, and I feel it’s one of the most important for a long term silver stacking. We need to follow the mining industry and the nupdates some numbers (price and dates). That’s obvious that with price increasing some new extracting will become economically feasible.
    Originally written by Siam Kidd January 2013
     
    Silver to become EXTINCT by 2020…
     
    Now this is a pretty strong statement. This ‘fact’ is being bounded around the internet quite a lot at the moment and so with all bold headlines like this, one needs to be wary. This is where you need to get your Due Diligence hat out and do some digging around before you take any action upon it because I’m sure there are many Silver dealers out there who have just used this ‘fact’ (without investigating it) in order to sell more Silver. So let’s break this down a bit. It all started a decade ago when the US National Geological Survey published a report that Silver could be totally exhausted by the year 2020 and that it was looking likely that Silver would be the first element on the periodic table to become extinct! As you can imagine, this caused a ruckus amongst the investing/Silver world and the majority of links on Google about this, stem from that very statement from the USGS. However, what a lot of sites fail to mention is that a few weeks after this statement, the USGS released an ammendment to their Silver comment and stated that Silver wouldn’t be 100% exhausted from the Earth’s crust, they just meant that by 2020 it would be economically unfeasible to mine for more Silver at those prices (roughly $4 an ounce).


    So is this ‘fact’ true then?

    Partly. Well it really depends what source you look at. There are several notable Geological companies/organisations around the world that specialise in analysing minerals and the Earth etc and all the results vary. In fact, if you look at the most recent USGS report from 2011, it now states that there’s around 17 billion ounces of Silver left in the crust. So with the world consuming roughly 1 billion ounces per year, that indicates another 17 years before Silver becomes ‘extinct’. As I said, different reports issue different figures and after hours of Googling (I made it to page 24) the general consensus does indicate that we have anywhere between 8-17 years left of Silver reserves in the Earth’s crust. HOWEVER, we can’t just stop there. There’s a lot more to this scenario to appreciate.

    The USGS wasn’t incorrect in stating this, they just lacked a bit of detail to their fact. Either that, or people in general have ignored the finer details. There’s a big difference between Silver becoming extinct and Silver becoming economically unfeasible to extract. Despite it’s increasing rarity due to huge global consumption, Silver will never become ‘extinct’. It will always remain in existence in the form of posh cutlery, ornaments, antiques, electronics, clothing and medicine etc. But there will come a time whereby it’s economically unfeasible to extract more Silver from the ground. At this point, to all intents and purposes, (especially for investing) it will have the same effect as becoming extinct. It’s at this point where I wouldn’t be surprised to see crazy Silver prices like $10 000 an ounce and upwards. Rhodium entered a similar situation between 2004-2008. There was a global deficit in supplies and so it went from $500 an ounce all the way up to $10 000. And Rhodium isn’t even half as in demand as Silver.

    So how long do we have then?

    This is where the USGS is partly correct. There may be around 15 years left of Silver in the crust, but we only have about 7-8 years left of economically feasible Silver to extract (at these current prices). You see there’s a common misconception in the rare earth mineral world between rarity and scarcity. Silver is very rare in the periodic table, but it’s also extremely scarce. This means that the Silver deposits in the Earth’s crust are of small volume and are scattered all over the place. As a result of this ‘peppered’ location of deposits, it’s just a waste of time/effort and money to set up a drilling operation for such a small return. So normally they don’t bother. It’s like being in a football stadium with loads of 1p coins scattered around it and there’s a few stacks of £20 notes dotted around. If you only had an hour to collect as much cash as possible, you’d just go straight to the big deposits of money and would ignore the 1p coins.

    Also due to Silver being extremely undervalued and under-priced at the moment, Silver is simply a byproduct of base metal mining operations like copper and zinc mines. These companies just get small amounts of Silver and sell it on for minimal profits. Also a lot of people are unaware of how time and money consuming mining is. From the moment a feasible deposit is found, it normally takes 7+ years to set up a producing mine! So we do effectively have 7-8 years left of Silver available.

    BUT…

    There’s more to this story. What a lot of people have overseen (including the USGS) is the availability of diesel. 97% of all transportation in this world is completely reliant upon diesel. This is mostly because trucks and lorries are the backbone to our way of modern life, which is why nations go to war for oil. It’s the ‘Weetabix’ of every country and more importantly, mining operations are 100% reliant upon diesel. No diesel = no mining. So how are diesel/oil reserves doing I hear you wonder? In a word: badly. How bad? Well you remember when BP messed up and spewed oil all over the Atlantic in 2010? That Deepwater Horizon oil reserve was one of the largest oil finds in recent history. Probably within the last 15 years at least. So even if BP managed to extract every single barrel of oil from that oil well, it would only be enough oil for just 24 HOURS of world consumption! I won’t labour the point, but the human population is in exponential growth as is our consumption of oil. But oil reserves are dwindling fast. Please read my previous article, ‘http://siamkidd.blogspot.co.uk/2013/01/nuclear-power-shale-hype-and-ignorant.html‘ for more info on this. But if we continue with the rate of wars waged as we’ve seen, and with oil reserves as it is, I wouldn’t be at all surprised if we only had about 5 years left of feasible Silver to mine due to rapidly increasing oil prices. Just putting it out there…but only time will tell…

    CONCLUSION

    In a nutshell, the USGS were partly correct. We currently have about 15 years left of Silver in the planet, but we only have about 7-8 years left of economically feasible Silver available for extraction. So combined with Silver being far rarer than Gold in investment form, prices need to increase 1000% before dedicated Silver mining operations start and the world is now buying 3 times more Silver than Gold, the next 1-5 years are going to be extremely interesting…

    In the meantime, I’ll continue building my financial Ark of Silver and Gold in preparation for this economic Perfect Storm brewing in the horizon…

  12. Silver price rally will be short-lived – Natixis
    Silver prices have rallied 12% in February but, according to French bank, Natixis, the rally is likely to be short-lived.
     
    It explains that, over the past year, much of the focus within financial markets has been on the Federal Reserve’s tapering plans, with interested parties worrying that “that a lack of liquidity would squeeze more precarious borrowers, in particular developing countries”
     
    But, while tapering has begun, monetary conditions remain extremely lax. And, it points out, US bond yields have fallen since the beginning of the year, while the dollar has been weakening since the beginning the month.
     
    “Both of these factors reaffirm the abundance of global liquidity, and help to explain the appreciation in precious metal prices since the beginning of the year,” Natixis writes, before adding, “To the extent to which lower US interest rates and a weaker dollar are associated with a weakening in the US economy, we would expect US economic data to improve as we move beyond the current bout of extreme weather which has dampened economic activity since December. This should help to raise US interest rates and strengthen the dollar, both of which would be negative for gold and silver prices.”And, because moves in silver tend to magnify those in gold, the bank says there are additional downside risks to silver – especially given the amount of silver now held in physically backed exchange traded funds.
    According to Natixis, the 19,340 tonnes currently held “is equivalent to almost 80% of 2012’s mined output”.
     
    “If last year’s mass exit from gold ETPs was followed this year by sales from silver ETPs, this could rapidly turn into a substantial new source of supply just as happened with gold last year.”
     
    And, while industrial demand for silver will pick up along with economic activity, “the price elasticity of this source of demand is low, hence it would be unlikely to be able to offset any substantial decline in investment demand.”
     
    As with gold, investment demand for silver has grown into a significant pillar of demand, currently around 25% of total demand for the metal.
     
    “Were this to fall to historical levels of 8% it would leave a big gap that industrial demand is unlikely to be able to fill,” the bank says.

    •  @tomsawyer
      “…we would expect US economic data to improve as we move beyond the current bout of extreme weather which has dampened economic activity since December.”
      And that is what you call MOPE.  Management of Perception Economics.  First rule of mope management:  DISREGARD WHATEVER FOLLOWS MOPE STATEMENT!
       
      Preceding from a false assumption will give you a false result.

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