Silver has once again strived to climb above $25 an ounce after briefly dipping below that threshold.
This is now the fifth time this month that silver has dropped below $25 and on each previous occasion, it has quickly rebounded, illustrating the strength of investor support at this level.
The peace talks in Ukraine are the main driver for markets currently with any signs of potential breakthrough met with a rise on equities and a decline in haven assets such as silver, while any sign of them breaking down or an escalation in violence provides a boost for gold and silver at the expense of equities.
As long as the war in Ukraine continues silver is likely to remain well supported but even if a peaceful resolution can be found in the coming weeks, which seems overly optimistic at this point, silver’s medium to long term prospects remains strong.
Demand for the metal is likely to increase as countries ramp up their adoption of solar energy, which uses silver in its photovoltaic cells, as they strive to meet net-zero goals and end their dependency on fossil fuels, particularly those sourced from Russia.
Furthermore, the current macroeconomic environment where inflation is at multi-decade highs in many countries broadens silver’s appeal as a hedge against rising prices.
The only significant headwind for silver is the forecast interest rate hikes by central banks to tackle inflation, which reduces the appeal of non-yield bearing assets like silver.
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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.