Silver has dropped back to now be dancing either side of $26 an ounce as the European Central Bank surprised investors by sticking to its hawkish pivot and weaning markets off the quantitative easing measures that have pumped huge sums of money into the economy over the last eight years.
While silver has slipped back a little from the highs achieved earlier in the week, the metal remains at levels last seen in August 2021 having benefited from two streams of support: a flight to haven assets; and a huge rise in the metals complex, most notably on nickel.
While gold is likely to suffer in an environment where interest rates are rising due to its lack of yield, silver can be slightly insulated from this hawkish outlook by the metal’s greater industrial use.
Most notably, silver is used in photovoltaic cells that will be in even greater demand as the world looks to speed up its move away from fossil fuels, particularly those produced in Russia, in favour of clean, renewable energy that can be produced domestically.
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