The disconnect between the gold and silver prices continues to widen with silver treading water around $24 an ounce while gold climbs above $1,900 an ounce.
After a strong finish to 2022, silver is struggling to find fresh support to drive it higher even though the macroeconomic environment is turning more favourable and industrial demand for the metal remains strong.
The latest US inflation data showed the pace at which consumer prices are rising continues to slow, increasing the breathing space for the Federal Reserve to be more modest with its upcoming interest rate moves. Yet while gold has benefited from the prospect of fewer rate hikes this year, its fellow non-yield bearing asset in silver has barely moved.
A second consecutive supply deficit in 2022 for silver and signs that fears of a global recession in 2023 may be overdone, with the UK posting some positive GDP numbers, would both point to silver likely to rise. Yet the price seems unable to break through resistance at $24 for now.
This looks like a clear buying opportunity with the gold/silver ratio now above 80 and silver still comfortably below its 2022 high even though the outlook is far more bullish now than it was back in March when it briefly climbed above $26 an ounce.
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.
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.
