A positive end to the week has seen silver climb back above $22 an ounce to levels last seen in early May.
While the metal still remains some way off the price it was trading for as recent as mid-April, this steady recovery is to be welcomed by silver investors after the asset seemed to be punished by every nugget of macroeconomic and geopolitical data or news.
The main reasons for silver’s recent gains are the weakening of the US dollar, which it is priced in, as well as a broader readjustment of prices across all markets after the sharp, and perhaps overdone, sell-off seen earlier in May.
Live Silver Price – $/oz
How far silver can gain will largely depend on where the majority of traders and investors see as the major driving force. If inflation fails to show signs of falling or at least plateauing when the next round of data is published, then silver is likely to come under pressure with central banks forced to continue to raise interest rates.
However, if the prevailing view is that the economy has suffered a few jitters but isn’t in as bad a place as recent moves on markets would suggest then silver has plenty of upward potential left in it.
It is worth remembering that in contrast to its precious metal peer, silver has substantial industrial demand. A growing global economy that is looking to accelerate the energy transition away from fossil fuels in favour of renewable energy, particularly solar, paints a healthy outlook for silver to rally into.
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 greenwashing 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.