Silver Cycles: Everything You Need To Know

Disclosure: Our content does not constitute financial advice. Speak to your financial advisor. We may earn money from companies reviewed.  Learn more

After a couple of underperforming years, silver prices have surged as of late. Given these extraordinarily uncertain times, it is unsurprising that savvy investors are turning to silver and gold ownership as a hedge against the turmoil. The silver market is full of opportunities for growth. In this article, financial professionals provide insight on everything investors need to know about silver cycles.

Silver Cycles Are Connected To Wars

“Silver cycles are connected to wars when you look at the graphs. We can see that in all wars, including those in recent times, the price of silver goes up very dramatically each time. With the prospects of more wars coming up in time, this could mean that the silver price could spike up again because of it. If we follow the prices from the 1910s to now, the price has slowly risen, so in another 100 years it will be double what it is now.”

Ethan Taub, CEO, Loanry

The Price Of Silver Is Dependent On Global Supply And Demand 

“The price of silver is dependent on global supply and demand (S&D), leaving small manipulation gaps – if any. The S&D is a function of huge industrial applications (solar panels, brazing alloys & soldiers, batteries, electronics, and ethylene oxide). Also, it's used in jewelry – consuming approximately 200 million ounces that year. Many of these industries are on the rise, creating a solid base for the metal in the long run.

Currency Movements – Silver tends to move inversely with movements in the USD (i.e., up when the U.S. dollar is weak and vice versa). So your question goes to predicting currency movements, a fool's errand unless you are technically competent. It's also a gold proxy to a certain extent.

The takeaway is this:

• The metal is exceptionally volatile, swinging back and forth by currency movements, industrial demand spikes and drops, and some gold alignment.
• The chances of retrieving its all-time high of $48 is anyone's guess. However, any directional move will surely be rollicked with ups and down along the way.
• It does seem to have stability based on industrial usage, so drops to around $15.50 (a recent resistance level) indicate an opportunity to buy the metal as an investment.”

Gordon Polovin, Finance Expert, serves on the advisory board for Wealthy Living Today

Never Exclusively Rely On Fixed Length Cycles In The Market

“The most important tip I can provide to investors who are interested in knowing more about Silver cycles in the market is the following – Never rely on exclusively on fixed length cycles in the market, because the dominant cycle can change dramatically from time to time depending on the current environment. I’ve found it best to use market cycles as a roadmap to help me stay on the right side of the market. In this regard, it is an excellent tool to help you go find the highest probability opportunities within the Silver market.”

Vic Patel, Founder – Forex Training Group

By 2030 We Should See A Higher Price For Silver

“We saw in 2018 that silver prices have risen quite a lot after having a depression in 2014. By 2019, it has gotten to a high price, and people could not believe it getting any higher. But from what we can see over the years that small inflations and the economy have made silver prices rise, so by 2030 we should see a higher price for silver, even if there is a depression inbetween these years. The sentiment for silver was not as high as it is now. A lot of people are interested in precious metals as investments as they are much easier to understand.”

David Baddeley, Director, Scottish Trust Deed

Focus On Smaller Mines, Particularly Those That Employ Advanced Extraction Tech

“In my opinion, one of the most important things for both silver and gold investors in the near future is to focus on smaller mines, particularly those that employ advanced extraction tech. These mines have the potential to produce silver at significantly lower costs than the big players, who are simply too big to outperform. Examples Leading Edge Materials (TSX.V: LEM) is the world's leading producer of iodine at its flagship Mt. Capra mine in Queretaro State, Mexico.

The company's products are sold under the brand name Elkem Iodine, and include triiodide, iodine, sodium iodide, and nitrate. The products are used in a wide range of industries, including catalysts, engines, elastomers, plasticizers, agriculture, photography, healthcare, and the solar industry. Production is exported to more than 75 countries. Evolution Mining (ASX: EVE) is another complementary silver producer that's often overlooked. The company is listed on the Australian Securities Exchange but its primary silver assets are located in the United States, where its management team has done a great job of putting together top-tier assets and extracting the maximum value in silver.”

Daniel Penzing, Chief Editor, Maze of our Lives

Silver's Performance Runs Counter Cyclical To The Economy

“What I find interesting is that as an authorized distributor of physical silver bullion for the United States Mint that ultimately our customers are not interested in cycles. They are purchasing silver (and gold) as a form of wealth insurance. To them, their interest in silver is ultimately using it as a hedge against the performance of other assets. Historically, silver's performance runs counter cyclical to the economy. When the economy is moving and expanding silver typically takes a back seat to equities but when things turn south in financial markets silver most often responds strongly. I'll also add that we find most of our customers cost average their purchases over a period of time so as to not get caught up in the more immediate ups and downs of the market. It's also important to note that silver bullion is a tangible asset that has no counter party risk when owned in physical form. This further illustrates the benefit to holding silver, especially in a down market.”

 Scott Hunt, President, Jack Hunt Coin Broker Inc.

Over the past several months amid the COVID-19 crisis, silver prices dipped as did the rest of the market. Yet, the precious metal soon rallied and continues to rise. This could be demonstrative of further increases in the price of silver. There is no better time than now to invest in silver and other precious metals. A simple way to gain exposure to silver is via a self-directed IRA. For those investors interested, have a look at the IRA-approved silver to get a better understanding of your options. In addition, for those interested, here are our reviews of top Gold IRA companies. Finally, always do your due diligence and consult a financial professional prior to making any investment decisions.