Silver is hovering around $21 an ounce having dipped under the threshold earlier in Friday’s trading session.
The latest downward price pressure for silver came from Federal Reserve Chair’s Jerome Powell’s comments this week in which he made clear that the central bank is determined to bring runaway inflation back under control and will keep on raising interest rates in order to do so. Another 75 basis point move seems near-certain in July with further hikes expected over the coming months.
Live Silver Price – $/oz
It was the prospect of central banks needing to adopt more hawkish monetary policies that sparked silver’s initial price plunge back in mid-April. From that point on the precious metal has struggled to find any support with the metal now trading close to its lowest in almost two years.
Rising interest rates make non-yield-bearing assets such as physical silver less attractive with silver’s fall from grace exacerbated by concerns over inflation turning into a global recession, diminishing the metal’s industrial appeal. It has been a sorry ride for silver holders over the last two months and the pain may not be over yet.
For those brave enough to look over the short-term horizon however, the fundamental case still remains strong in the medium-term with physical demand for the metal likely to reach a fresh record high this 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 greenwashing 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.