Silver is ending the month by perking back above $19 an ounce to underline the interesting situation the precious metal finds itself in.
Having suffered a brutal few months from April onwards on the back of the Federal Reserve’s switch to a hawkish stance in which it would implement a series of interest rate hikes to try and tame fast-rising consumer prices, silver’s price sank so low that it fell way below its fair value based on the fundamental outlook for the metal.
As such, even though the Fed, and other central banks around the world, continue to raise interest rates, silver doesn’t really have any further for it to fall with buyers instead taking advantage of any dips to top up their exposure. The result is that silver now finds itself in a holding pattern around $18 to $20 an ounce
A strong US dollar and hawkish central banks mean that silver is struggling to make significant gains and failing to challenge the threshold of $20 an ounce as a result, yet on the upside, any drops near to $18 an ounce prompt buying activity as investors respond to the cheapness of a metal that will be in big demand as the energy transition gains pace. Expect October to hold a similar pattern with these drivers set to persist for a while longer yet.
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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