Silver’s failure to climb back above $25 an ounce points to the strength of investor support fading for the time being. On the previous occasions in March that silver had tested this support level, the price had quickly rebounded back above the $25 threshold but this time it has instead continued to drift steadily lower.
Silver is so far being driven by the same factors as gold with the hawkish rhetoric from central banks in the US and Europe putting pressure on non-yield bearing assets such as silver and gold. While this is presenting a firm ceiling for any gains, the war in Ukraine is providing strong support to how low silver can drift.
With it now being about a month and a half since Russian troops first invaded Ukraine, the bulk of the fear trading prompted by this will have been priced in by now.
However, Ukrainian Foreign Minister Dmytro Kuleba’s recent request for weapons, weapons and weapons illustrated how long-lasting the conflict looks set to become with any fresh escalation likely to see a renewed rush to haven assets such as silver.
Indeed while for now silver seems stuck in gold’s wake, tracking its move both higher and lower, the fundamental outlook still points to silver’s potential to break out higher.
Industrial demand for the metal looks strong and may even strengthen further as countries rush to increase solar energy that require silver-containing photovoltaic cells. So while silver may be trapped in the doldrums for now, a fair wind to push it higher may just be over the horizon.
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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