A positive end to the week has seen silver climb back above $22 an ounce to levels last seen in early May.
While the metal still remains some way off the price it was trading for as recent as mid-April, this steady recovery is to be welcomed by silver investors after the asset seemed to be punished by every nugget of macroeconomic and geopolitical data or news.
The main reasons for silver’s recent gains are the weakening of the US dollar, which it is priced in, as well as a broader readjustment of prices across all markets after the sharp, and perhaps overdone, sell-off seen earlier in May.
Live Silver Price – $/oz
How far silver can gain will largely depend on where the majority of traders and investors see as the major driving force. If inflation fails to show signs of falling or at least plateauing when the next round of data is published, then silver is likely to come under pressure with central banks forced to continue to raise interest rates.
However, if the prevailing view is that the economy has suffered a few jitters but isn’t in as bad a place as recent moves on markets would suggest then silver has plenty of upward potential left in it.
It is worth remembering that in contrast to its precious metal peer, silver has substantial industrial demand. A growing global economy that is looking to accelerate the energy transition away from fossil fuels in favour of renewable energy, particularly solar, paints a healthy outlook for silver to rally into.
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