Silver is drifting along a little below $25 an ounce as investors await a fresh catalyst.
Even though the price has dropped since climbing above $25 an ounce earlier in the month, April looks set to be a second positive month for silver with the precious metal benefiting from a rush to haven assets, with its lack of counterparty risk also proving attractive in the wake of the crisis in the US banking sector.
Where silver heads from here will largely be determined in the short term by next week’s interest rate decisions, particularly that of the Federal Reserve. So much of silver’s fortunes have been tied up with the words and actions of the US central bank and its officials so while next week’s decision, which is set to see the benchmark rate raised by another 25 basis points, may have been priced in, the commentary surrounding the decision and the outlook for future moves will be just as important.
If next week’s expected hike proves to be the final one in the Fed’s current cycle, then attention can return to silver’s strong fundamental case in which physical demand from industrial sectors including solar and electric vehicles is outstripping supply. As such, with silver having enjoyed two positive months and showing signs of having built up considerable support, the next move could be higher again and see silver challenge last year’s high above $26 an ounce.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
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