In a November 22 Barchart article on silver, I concluded:
Buying gold and silver on price weakness since the turn of this century has been optimal, and I expect that trend to continue. Silver settled at $5.413 per ounce at the end of 1999. Silver’s path of least resistance remains higher at over $31 per ounce in November 2024, and we could see a challenge of the 2011 and 1980 highs over the coming months and years.
Nearby COMEX silver futures were trading at the $31.275 per ounce level on November 22 and have moved marginally lower in late December. As silver’s price consolidates, the precious metal could build steam for a run at much higher prices in 2025.
The long-term chart is very bullish
The continuous COMEX silver futures contract reached a low of $11.64 per ounce in March 2020 as the global pandemic gripped markets across all asset classes.
As the monthly continuous futures contract chart highlights, silver has made higher lows and higher highs since the March 2020 bottom. Silver futures reached the latest $35.07 high in October 2024. While the price declined from the October peak, silver futures for delivery in March 2025 remain above $30.50 per ounce in December 2024.
The quarterly continuous futures chart shows that silver futures reached the highest level since late 2012 during the recent rally.
Gold and Bitcoin are reasons why a herd of buyers could descend on the silver market
Silver has a long history as an asset, a store of value that dates back thousands of years. Silver is in a unique category with two other assets, one with a long history and another that has only been around since 2010.
Gold is silver’s financial sibling, as both precious metals have been valuable assets throughout history. While silver prices remain substantially below the 2011 $49.82 high and 1980 $50.36 record peak, gold reached a new record high in late October 2024.
The quarterly continuous COMEX gold futures contract illustrates the latest record $2,801.80 per ounce high.
The path of gold and silver prices is a function of sentiment. Investment demand tends to drive the prices of precious metals higher or lower over time.
While gold and silver have been assets since pre-biblical times, a new arrival shares some of the same attributes. Bitcoin is the leading cryptocurrency that began trading in 2010 at five cents per token.
The chart highlights Bitcoin’s parabolic rally since 2010, which took the crypto to over the $100,000 level in December 2024. Incredibly, a $1 investment in Bitcoin in 2010 was worth over $2 million in late 2024.
New highs in gold and Bitcoin’s parabolic ascents could cause value-seeking investors to turn to silver as the price offers value compared to its historical price levels.
Buying on dips is optimal- Even the most aggressive bullish trends experience pullbacks
Silver has been in a bullish trend since March 2011, but the price has not moved higher in a straight line.
The five-year consecutive COMEX silver futures chart displays the bullish trend. However, silver has suffered significant pullbacks on its path to higher prices. After reaching the $11.64 March 2020 low, silver futures rallied 160.74% to a $30.35 high in February 2021. The price then corrected 42.67% to a $17.40 low in September 2022. While silver has made higher lows and higher highs since trading at $17.40 in September 2022, there have been substantial periodic corrections along the way. The bottom line is that buying silver on price weakness has been optimal. Even the most aggressive bull markets rarely move in straight lines; silver is no exception. Moreover, since silver tends to be more volatile than gold, corrections can be more dramatic on a percentage basis.
The factors that support higher silver prices
The following factors support a continuation of the bullish silver trend in 2025:
- Silver’s industrial demand for electronics will rise in 2025.
- The global silver market was in a supply-demand deficit in 2024 for the fourth consecutive year.
- Investment demand tends to drive silver prices. The ascent of gold and Bitcoin illustrates the demand for assets that store value. Silver could experience increased investment demand in 2025 as gold and Bitcoin have risen to record highs, and silver offers value compared to its 2011 and 1980 historical high prices.
- The trend is always an investor or trader’s best friend. Silver’s path of least resistance has been higher since 2020.
It may be a matter of time before silver prices challenge the 2011 and 1980 peaks at around $50 per ounce.
Technical levels to watch in the silver futures market
Silver prices came close to the technical resistance levels of October 2012 in October 2024 before correcting.
The chart illustrates the first upside target for the silver futures market is at the October 2012 $35.445 per ounce resistance level. Technical support is at the August 2024 $26.505 low. A move below that price would threaten the bullish trend since the March 2020 low.
Silver futures have moved into a consolidation pattern over the past month.
The daily chart of March COMEX silver futures shows the narrow trading range between the November 29 $30.095 low and the November 19 $32.04 high. Silver has been trading within this range since November 11. Consolidation can be healthy for a market. As silver digests the latest $35.07 continuous contract high, it could be building cause for a move to higher highs in 2025.
On the date of publication, Andrew Hecht did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
- Is Consolidation in Silver Bullish?
- Why is Gold Stalling?
- Is Gold’s Correction Another Buying Opportunity?
- Will Silver Trade at New Record Highs in 2025?
