Silver’s slide has seen the price of the metal drop below $23 an ounce, which is quite a sharp reversal given it was trading close to $25 at the end of July.
Silver’s short-term grace is the result of a stronger US dollar, which hits the relative value of the dollar price for the metal, as well as lingering fears that the Federal Reserve hasn’t yet finished its series of interest rate hikes.
Tomorrow’s publication of the latest US inflation figures therefore marks a key data point for traders and investors to assess the likelihood of the Fed implementing another hike in September or whether inflation is sufficiently cool for the US central bank to be able to leave rates unchanged.
Stepping away from the macroeconomic cloud hanging over silver, the fundamental outlook for the metal remains as strong as ever with industrial demand for silver continuing to outpace supply. Therefore a long-term investor could see silver’s recent dip in price as the opportunity to top up holdings or as an excellent entry point to gain exposure to a metal that looks significantly undervalued on a purely fundamental basis.
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.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
