Silver finds itself under pressure again as investors continue to see the Federal Reserve’s expected series of interest rate hikes as the key macroeconomic driver.
In this environment, silver keeps being punished even though the US central bank’s comments on its short-term economic policy were announced last week.
As such, silver has quickly gone from trying to hold on to the key recent level of $25 an ounce just a week ago, the metal now finds itself only a little above $23 an ounce at its lowest level since mid-February.
Live Silver Price Chart – $/oz
Yet silver’s decline could present a buying opportunity, particularly in the wake of Russia cutting off gas supplies to Poland and Bulgaria, as this is likely to increase the pace at which European countries seek to move away from their reliance on fossil fuels, particularly those sourced from Russia. While some alternatives, notably nuclear, will take many years and many billions in expenditure to start producing, solar and wind can start generating in a much shorter time frame.
Silver is used in the production of both photovoltaic cells for solar energy and is also used to lengthen the lifespan of wind turbines. This industrial component of silver offers a way out from its current short-term decline and investors willing to look through the strong headwind presented by an environment of rising interest rates may see silver offering good value in the medium-term.
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 greenwashing while investing sustainably.
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