Silver is experiencing a slight dip today having climbed comfortably above $21 an ounce as investors sought out its haven qualities on the back of the collapse of three US banks.
After silver was initially slow to respond to this increased haven demand, the precious metal has enjoyed a considerable upsurge with the price gaining almost $2 an ounce before slipping back slightly.
Next week’s Federal Reserve interest rate decision will have crucial importance in determining silver’s direction in the short to medium term. The sentiment is once again returning to the Fed implementing a 25 basis point hike after the initial collapses of Silvergate, Silicon Valley and Signature led to some expecting the US central bank to hold off on any further increases.
If rates do continue to rise then silver’s scope for further gains will be capped, despite the strong fundamental case for the metal. However, if the Fed is unexpectedly dovish and does keep rates where they are then silver could make considerable gains with demand for the metal outstripping supply and yet still trading at levels considerably lower than where it started the year.
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.
