Silver is hovering around $21 an ounce having dipped under the threshold earlier in Friday’s trading session.
The latest downward price pressure for silver came from Federal Reserve Chair’s Jerome Powell’s comments this week in which he made clear that the central bank is determined to bring runaway inflation back under control and will keep on raising interest rates in order to do so. Another 75 basis point move seems near-certain in July with further hikes expected over the coming months.
Live Silver Price - $/oz
It was the prospect of central banks needing to adopt more hawkish monetary policies that sparked silver’s initial price plunge back in mid-April. From that point on the precious metal has struggled to find any support with the metal now trading close to its lowest in almost two years.
Rising interest rates make non-yield-bearing assets such as physical silver less attractive with silver’s fall from grace exacerbated by concerns over inflation turning into a global recession, diminishing the metal’s industrial appeal. It has been a sorry ride for silver holders over the last two months and the pain may not be over yet.
For those brave enough to look over the short-term horizon however, the fundamental case still remains strong in the medium-term with physical demand for the metal likely to reach a fresh record high this year.
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