Posted 9th March 2022

Silver Slips Back Amid Rare Day of Optimism for Equities but Holds Above Key Level

silver news march 09

Macroeconomic Analysis

After the fall comes the recovery, well a recovery of sorts at least. Finally a glimmer of green for equities markets after days of punishing losses. Yet it shows the extent of the declines recorded both earlier this week and since Russia’s invasion of Ukraine more broadly, that today’s healthy gains across global indices are only trimming the weekly and monthly losses. 

Where that optimism is originating from is difficult to understand as the situation in Ukraine remains woefully bleak with no sign of an easy end to the war. The united front being shown by the US and its European allies is the sole source of hope that these ever more punishing sanctions, that now include a banning of Russian oil exports into the US and the UK, will force Russian President Vladimir Putin to agree on a peaceful end to the conflict in Ukraine, particularly as in the face of fierce Ukrainian resistance, his planned takeover is becoming much more protracted than he surely must have originally envisaged.

These severe financial sanctions will need to bring about a swift end to the war in Ukraine before they severely damage the tentative economic recovery that was in place prior to Russia’s invasion. That glimmer of hope remains for now that the global economic fallout will be capped and the recovery can resume but the short-term impact of the sanctions with record-high energy and metals prices already damaging demand means that the window of opportunity is ever narrowing.

Silver Price Analysis

Just like gold, silver has slipped back a fraction today amid a rare day of optimism on equity markets. It is worth noting that silver’s decline has been smaller in percentage terms than gold with the price holding above $26 an ounce.

silver chart kinesis exchange
Silver ($/oz) Chart – from Kinesis Exchange – Silver over a year time frame

Silver’s more industrial use, including in photovoltaic cells for example that is likely to see increased demand amid the energy transition, has seen silver benefit from both its haven appeal as well as the whole metals complex being pulled up. 

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