The prospect of further interest rate hikes to come from the Federal Reserve allied with today’s confirmation of the latest increase by the European Central Bank has stopped silver’s steady climb in its tracks, with the price dipping back towards $23 an ounce.
Just as silver looked set for a period free of macroeconomic interference, yesterday’s Fed news pointed to at least one more hike in its benchmark rate to ensure it has well and truly tamed stubbornly high inflation.
Given that the Fed’s series of interest rate hikes over the last year or so have been the single biggest drawback for silver, the likelihood of that cycle not yet being complete has hit silver’s price. How lasting the dip proves will largely depend on data released between now and the Fed’s next meeting.
If the Fed’s current semi-hawkish stance proves more bark than bite then attention can once again shift back to silver’s resounding fundamental case with the metal in hot industrial demand. As such, an investor looking to the long-term may see today’s dip as another opportunity to top up holdings before the inevitable climb higher.
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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