Silver has finally had some light relief with the price climbing back towards $21 an ounce with the US dollar much weaker and the prospect of a more dovish Federal Reserve following the collapse of Silicon Valley Bank.
While silver’s gains haven’t been as impressive as those for its precious metal peer, it has at least managed to reverse the downward trend that had seen it slide from close to $24 at the start of February down to just above $20 an ounce last week.
Next week’s interest rate decision by the Fed now takes on even greater significance than it already had with the markets desperate to know how the US central bank will respond after the hit to its financial system following Silicon Valley Bank’s failure.
Fed officials have been at pains to reiterate that the battle to fully curb inflation is far from over with more hikes needed but whether that position can still hold now is open to question.
For silver investors, the prospect of the Fed being forced to end its hawkish stance early could be the catalyst the metal has desperately needed to switch attention back onto its very strong fundamental case. So for a brave investor, these lowly levels could now represent a great buying opportunity.
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