Silver is just about holding above $25 an ounce on a day in which the Federal Reserve is expected to announce a 25 basis point hike to its benchmark interest rate.
With today’s decision long since priced in, the focus is not so much on the decision itself but the words of the Fed Chair Jerome Powell that will follow the announcement. Silver has struggled in the face of the Fed, and other central banks, aggressive interest rate policies in the last year so investors will be hoping that Powell’s words point to this cycle of hikes drawing to a close, so attention can switch to silver’s strong fundamental case.
Silver has enjoyed an impressive run, gaining $5 an ounce or about 25% since languishing barely above $20 an ounce as recently as early March so the prospect of the Fed pausing interest rate hikes, the single biggest headwind for the precious metal in recent times, opens up the potential for silver to climb higher yet.
Bearing in mind that silver is still trading below where it was in March 2022 before the Fed implemented the first of its aggressive hikes and the fundamental picture in which demand is comfortably outstripping supply, the metal can easily climb to $26 and even ultimately towards $30 over the course of the second half of the year.
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.
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