Posted 1st agosto 2022

Silver Reinforces View That Bottom Has Been Reached as Price Holds Above $20

silver bar bullion

Silver is holding above $20 an ounce, reinforcing hope among holders of the precious metal that the price did indeed reach its bottom in July and that August can bring further upsides.

The decisions by central banks will be a key determinant of how much further silver can recover with the Reserve Bank of Australia and the Bank of England both expected to announce increases of 50 basis points to their benchmark rates later this week.

While these two banks don’t carry the same sway as the Federal Reserve in terms of the price reaction they have on markets, investors will still be interested to hear the bankers’ view on the state of their respective economies and how much further they feel they will need to raise rates.

Given that it was this change to a more aggressive monetary policy that sparked silver’s slump in price from mid-April onwards, these rate decisions will still be a source of worry for holders of the metal. 

The hope that silver and indeed the broader market is clinging to is that inflation is peaking and will track lower over the coming months and with the global economy still in a very fragile state, central bankers will reduce their path of aggression in the coming months to avoid tipping their economies into recession.

How right this hypothesis proves will be the key in determining whether silver’s strong fundamental story can be heard or whether it is once again overwhelmed by hawkish monetary policies.

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.