Silver is just above $23 an ounce at the start of a busy week for central bank interest rate decisions.
The prospect of a further increase by the Bank of England following last week’s rise by the European Central Bank presents a challenging macro environment for a non-yield-bearing asset like silver. However, with these increases long anticipated and therefore priced in, another 25-basis point hike is unlikely to have a significant impact on the silver price.
More significantly will be the supporting commentary of the Federal Reserve’s decision, with a hold all but guaranteed. Investors and traders will be gleaning the words for hints on where the US central bank sees rates going over the coming months, particularly how soon any rate cuts will be. Given it has been the Fed’s series of interest rate hikes that have kept the silver price so subdued over the last year or so, silver investors will be hoping for hints of cuts on the horizon.
This could finally give silver the lift the metal needs to climb back to the highs touched this year and last above $26 an ounce and enable the focus to switch back to the metal’s resoundingly strong fundamental case in which demand outstrips supply for the foreseeable future.
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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