Silver is back above $20 an ounce!
After months of silver’s price only going one way, the tentative evidence of the bottom being reached has now developed into a recovery of sorts following the comments supporting the Federal Reserve’s interest rate decision earlier in the week.
So strong has been the initial reaction to signs that the Fed may be less aggressive with future interest rate moves that silver looks set to end July almost back where it started the month. This is a neat illustration of silver’s increased volatility compared with its precious metal peer, gold.
The same factor, a potentially less aggressive Fed, has also seen gold recover some of the ground it has lost over the course of the month but while gold still remains some way below the levels it was at the end of June, silver’s outsized gains have seen it make up for lost time and be back above the psychologically important threshold of $20 an ounce.
Silver investors will be hoping this is the start of a sustained rally as, from a fundamental perspective, the price still looks some way off fair value given the burgeoning demand for the metal as part of the energy transition.
However, silver’s volatility has left many a punter burnt in the past and while the long-term outlook remains supportive, nearer-term factors of how great the Fed’s next interest rate move actually is as well as concerns that the world is tipping into a recession, and therefore diminishing industrial demand for silver, may yet drag on silver’s attempts to recover more of the ground it has lost since mid-April.
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.