Silver has slipped back under $20 an ounce as the markets brace themselves for a busy week of news which should provide greater clarity on the macroeconomic picture in the US as well as the Federal Reserve’s stance on how it is seeking to balance curbing inflation without tipping the country into a recession.
This reappraisal has once again seen silver suffer against the prospect of continued rate hikes by the Fed, particularly if this week’s US inflation figure remains stubbornly high.
While silver investors may be fearful of an oversized reaction to any comments from Fed officials this week, with representatives speaking on nearly every day this week, the recent trading history points to a market that has found its bottom and each dip now followed by buying interest from traders seeing an asset that has become undervalued.
Indeed the dislocation between the fundamental demand for silver, with India in particular showing considerable buying interest, from a futures market driven by macroeconomic factors presents a buying opportunity for a long-term holder.
Vaults in London are being emptied with the amount of silver held now at its lowest levels since the London Bullion Market Association started reporting the data in July 2016. With lots of this metal being exported to Asia for physical demand, it further underlines the solid support floor created for the silver price.
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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