Silver is once again trading above $25 an ounce as the metal recovers some of the territory it lost last week.
The precious metal now finds itself pulled by contrasting factors brought about by the current macroeconomic and geopolitical environment.
The continuation of talks between Russia and Ukraine lends hope that a peaceful solution can be found. This has been the main driver in equities rising with silver coming under pressure as a result.
However, the war has also exacerbated the inflationary environment that has been ever-present in 2022. This has driven up the price of commodities, including metals, while silver is also considered a hedge against inflation.
So far this potential boost for silver has been outweighed by central banks, including the Federal Reserve and the Bank of England, increasing interest rates to tackle inflation, making non-yield bearing assets like silver less attractive. Indeed, silver’s recent price curve has mirrored that of gold, as is often the case.
If silver can decouple itself from gold and the focus of investors switch to its more industrial qualities than gold, most notably its use in photovoltaics used in producing solar energy, then there is considerable scope for silver to gain with it looking undervalued currently.
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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.