Silver’s slide has seen the price of the metal drop below $23 an ounce, which is quite a sharp reversal given it was trading close to $25 at the end of July.
Silver’s short-term grace is the result of a stronger US dollar, which hits the relative value of the dollar price for the metal, as well as lingering fears that the Federal Reserve hasn’t yet finished its series of interest rate hikes.
Tomorrow’s publication of the latest US inflation figures therefore marks a key data point for traders and investors to assess the likelihood of the Fed implementing another hike in September or whether inflation is sufficiently cool for the US central bank to be able to leave rates unchanged.
Stepping away from the macroeconomic cloud hanging over silver, the fundamental outlook for the metal remains as strong as ever with industrial demand for silver continuing to outpace supply. Therefore a long-term investor could see silver’s recent dip in price as the opportunity to top up holdings or as an excellent entry point to gain exposure to a metal that looks significantly undervalued on a purely fundamental basis.
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