Posted 27th abril 2022

Silver Continues to Fall in Short-Term But Fundamental Outlook Provides Hope

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Silver finds itself under pressure again as investors continue to see the Federal Reserve’s expected series of interest rate hikes as the key macroeconomic driver. 

In this environment, silver keeps being punished even though the US central bank’s comments on its short-term economic policy were announced last week. 

As such, silver has quickly gone from trying to hold on to the key recent level of $25 an ounce just a week ago, the metal now finds itself only a little above $23 an ounce at its lowest level since mid-February. 

Live Silver Price Chart – $/oz

Yet silver’s decline could present a buying opportunity, particularly in the wake of Russia cutting off gas supplies to Poland and Bulgaria, as this is likely to increase the pace at which European countries seek to move away from their reliance on fossil fuels, particularly those sourced from Russia. While some alternatives, notably nuclear, will take many years and many billions in expenditure to start producing, solar and wind can start generating in a much shorter time frame. 

Silver is used in the production of both photovoltaic cells for solar energy and is also used to lengthen the lifespan of wind turbines. This industrial component of silver offers a way out from its current short-term decline and investors willing to look through the strong headwind presented by an environment of rising interest rates may see silver offering good value in the medium-term.

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