The safe haven qualities of silver and its lack of counterparty risk have seen the precious metal climb well above $22 an ounce to its highest level since early February.
While silver hasn’t enjoyed the same rally as its precious metal peer, gold, it has nonetheless been a beneficiary of the fallout in the banking sector with the collapse of three US banks, urgent help to avoid the failure of a fourth one followed by this weekend’s rushed deal with UBS buying Credit Suisse.
Silver’s failure to make more significant gains so far illustrates how out of favour the precious metal had become in February even with its healthy industrial demand outlook. Concerns over rising interest rates have weighed heavily on the case for silver so this week’s Federal Reserve interest rate decision is certain to have a significant impact on the metal’s ability to make further gains.
In the course of a few dramatic days, what looked like a certain 25 basis point increase by the Fed has now become less clear with the case for a pause while the current banking crisis subsides growing stronger.
If the Fed does decide to keep rates where they are then that will open the door for further silver gains with the metal having plenty of ceiling to climb to with its price still below where it started the year even though the fundamental case for the metal hasn’t changed.
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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