So much for silver showing signs of finally stabilising with the price holding around $19 an ounce. A few days later and silver is on the slide once again to be verging on $18 an ounce.
The latest catalyst for silver’s decline is the prospect of the Federal Reserve increasing interest rates by 100 basis points, or one percentage point, when it meets later this month. The US June inflation figure came in higher than forecast at 9.1% earlier this week, adding pressure on the US central bank to do more still to curb these ever escalating prices.
Live Silver Price – $/oz
Atlanta Fed President Raphael Bostic said earlier in the week that “everything is in play” when the committee meets. While a 75 basis point move remains the most likely option, this rhetoric about even stronger moves is punishing non-yield bearing assets such as silver as well as helping strengthen the dollar.
Aside from the fleeting respite glimpsed earlier in the week, silver has been punished by the markets for every incremental macro-economic event or comment and it is difficult to see where support can come from in the short-term. The bottom has proven impossible to call for silver but when it finally is found, the fundamental demand outlook paints a far rosier picture.
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