Silver’s fall from favour so far in 2023 is summed up by the contrasting reaction to the same piece of news by silver and its precious metal peer gold.
While gold has made significant headway as it recovers a significant amount of its losses from Friday, silver has only increased a fraction and continues to trade in a lowly range near its lowest for two months.
The reason for gold’s positive reaction was yesterday’s comments by Federal Reserve Chair Jerome Powell being interpreted as less aggressive than anticipated even though he reiterated the need for more interest rate hikes to ensure inflation is fully tamed. While it would be right to question whether the market’s reaction is appropriate to Powell’s cautionary remarks, the fact remains that gold’s gain was markedly higher than the equivalent increase for silver.
The prospect of a less aggressive Fed in 2023 allied to silver’s fundamental case that shows demand increasing and supply struggling to keep up should point to silver climbing ever higher this year. So far, that has been far from the case with silver trading at levels last seen in early December.
Yet without wanting to sound like a broken record, the case still remains valid for silver to perform strongly in 2023 and while it has undoubtedly been a frustrating opening month for bullish silver investors, their patience will surely be rewarded in the long run.
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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