Silver’s volatility is once again on full display with the price dropping almost $2 an ounce in a matter of days to now be trading below $24 an ounce.
The fact that this downward shock has come even with the market conditions seemingly looking favourable for silver, illustrates how hard it is for investors to focus on silver’s strong fundamental case with the metal so prone to sentiment whims.
With the Federal Reserve seemingly coming to the end of its hiking cycle, one of the big obstacles that has hindered silver’s progress in the last year looks to be removed. Yet even though the US inflation data released earlier in the week would further support this likelihood, silver has suffered a sharp reversal in its fortunes seemingly on concerns of the industrial outlook.
Yet while the global economy remains in far from rude health, silver draws much of its industrial demand from two sectors, solar and electric vehicles, that are key parts of the energy transition, something that is going to continue regardless of economic figures given its climate importance.
Therefore these sharp dips in the price of silver could once again open up a buying opportunity for the investor seeing silver’s long-term appeal with the metal continuing to trade well below where its supply and demand imbalance suggests it should be.
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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